Claim denials have been plaguing medical practices for quite a while now. Claim denials are detrimental to the financial health of a practice because they lead to delayed payments, decrease in revenue and heavy fines. The most common reason that leads to claim denials is billing errors. Even the practices with the most diligent staff would tell you that their claims have been denied at least once. However, even if this is a commonality, as a clinician you shouldn’t get accustomed to denied claims especially since there are ways to avoid mistakes. So, before we talk about tips to avoid claim denials, let’s look at the common billing errors that cause claim denials.

1. Unspecific coding

The most apt practice to code a diagnosis is to use the highest level of it while transcribing. For example, in ICD-9 nasal congestion had the code 478.19, whereas influenza with other respiratory manifestations was coded using 487.1. In ICD-10 influenza/flu is coded under J11.1 whereas nasal congestion is coded under R09.81. Although these two conditions are interlinked, it should be made clear that the codes for the two diagnosis cannot be used interchangeably. If they somehow do get used for one another, you might as well should expect denied claims at hand.

The root of this problem also relies heavily on lack of information on the staff’s part. It is also the responsibility of the doctor to provide adequate details of the care provided to the coder so that there is no room for misinterpretation which would lead to an incorrect medical diagnosis code.

2. Upcoding

Upcoding is usually done on a practitioner’s part when he alters the diagnosis of a patient and uses the code of a much serious disease in order to charge a much higher price and lead to an inflated medical bill.

So, for example, if you met a patient for barely 20 minutes for a routine checkup but your coder recorded it as a session of a complete hour then it could cause you problems. Although, most upcoding cases are not as blatant as this one but they can be. This practice is going to put your healthcare center in jeopardy because it’s illegal! In fact, recently a psychiatrist was fined $400,000 and his services were terminated because he exaggerated the time he spent with his clients, in an attempt to inflate his medical bill.

3. Unbundling

Unbundling is referred to the practice in which coders list down diagnosis or services separately which actually just fall under a package deal and cost significantly less together than when they are unbundled. Unbundling like upcoding is also done in order to give the total medical bill a boost which otherwise wouldn’t have been possible. For example, if a patient is required to take a set of medical tests which essentially fall under the same category, but are given different codes to surge the bill then this is an instance of unbundling

4. Balance billing

Balance billing takes place when the patient receives the medical bill with fees beyond his co-payments or co-insurance. If these payments actually do fall under the policy the patient has opted for then the balance bill will be labeled illegal and the patient would not have to pay for it at all. If he chooses to report this, you could expect to foresee a lawsuit.

One of the most common reasons behind the occurrences of balance billing is that coders usually mistake services acquired for emergency care which isn’t covered by policy but are, merely in-network services which do in fact fall under the policy.

5. Incorrect patient identifier information

Even though, this is one of the easiest issues to resolve as a little attention to detail will lead to correct patient identifier information, still this problem persists and is one of the biggest reasons why claims get denied. You can start off by making sure you have taken the correct information from your patients including their name, age, insurance payer ID and finally enter the right diagnosis code and the primary insurance provider in case the patient has multiple providers. Make sure to go over the information more than once to ensure its accuracy.

6. Misinterpreting the Explanation of Benefit (EOB) Form

Understanding the Explanation of Benefit form is not always that easy. To comprehend what was paid and why the portion of the claim that was denied was denied, a thorough understanding of the form is required. For a clinician, if the amount received is less than what was expected he shouldn’t just let it go, instead, he should carefully study the EOB form to figure out what his best strategy could be in order to resubmit the claim for the full amount.

Accepting an initial amount less than anticipated is not a healthy practice for the financial health of your business, therefore it is always a good idea to validate if the payments sent are correct against the codes or not.

7. Falling behind the review date of clearinghouse reports

With a massive influx of patients on a daily basis, tons of paperwork to deal with and a slew of ICD codes to follow for billing, it is a commonality for a medical center to be flooded with a lot of work every single day. To top it all off, if medical staff has to care about checking clearinghouse reports too, it is enough to frustrate them. So instead of keeping clearinghouse reports at the lowest priority, we recommend you to make it your number one priority so that your staff members can’t use the fact that they didn’t have the time as an excuse.

Clearinghouse reports are essential for detecting problem areas that led to the deduction of your medical bills. Attentively going through them gives you a second chance at claiming your dues, which is why you and your staff needs to be vigilant while going through these reports, and ensure that you get it done as quickly as possible.

8. Ineligibility for insurance

Insurance information contrary to our expectations, doesn’t always remain the same. In fact, it can alter any day of the month without any notices in advance. Even the most regular patients can’t rest assure that their insurance information won’t be subjected to any alterations, therefore the brunt of the consequences of these changes has to be borne by the medical billing staff. So, it is absolutely crucial to validate, whether or not, a patient is eligible for a service, regardless of how long has he been your client.

9. Using outdated codes

Another reason why medical claims are denied is because some medical billing officers abide by old coding books which are no longer applicable. For example, ICD-9-CM code for stomachache is 789.00, whereas for ICD-10-CM, stomachache is billed under R10.9.

Even though, updating billing coding books can be heavy on the budget, it is worth it to keep claim denials at bay.

10. Handwritten errors

It may seem like a rookie mistake, but handwritten errors actually exist and cause practices to lose money. Poor penmanship of a medical billing officer can lead to misinterpretation of information on the part of a coder which can cause denied claims.

The best practice to eradicate such errors is to move from paper-based processes to computerized processes. The mistakes will be highlighted and will be easily corrected as opposed to the manual process.

11. Missing information from the claim

If the claim form is missing any sort of information then you can expect a denied claim at hand as it is absolutely vital to fill in all the blanks with apt information. The most common fields that often go missing are: accident date, date of visiting the healthcare center and onset date.

12. Claim filed succeeding the due date

According to the Affordable Care Act a claim needs to be submitted within 12 months of acquiring a medical service. In addition to that, you also need to bear in mind that it doesn’t matter if you send the claim a day before the due date, your claim will only be accepted if the Medicare contractor receives it prior to the end of the calendar year from your starting date. If the contractor is unable to receive it in due time, then reimbursements will be denied to you right away.

13. Duplicate billing

It is quite customary for a practitioner to mistakenly send the claim of a bill more than once. This is a form of human error which commonly occurs due to resubmission of a claim. All of the Medicare contractors have a procedure to identify duplicate bills. Duplicate bills are put into two categories. They are either categorized as exact duplicate or suspect duplicate. Some services make a claim appear to be duplicate when in reality it isn’t. By carefully identifying modifiers and codes a service is deemed not duplicate and is paid for.

14. Failure to provide documentation that supports medical necessity

 At times it is crucial for a payer to look into the documentation of a patient before he can decide on approving a claim. Such documents can include patient’s medical history, doctor consultation documents, prescriptions or operative report. Medicare contractors decide on whether a treatment was necessary or not based on these documents. Therefore, the best way to ensure that you remain within the bounds of medical necessity is to have all sorts of documentation readily available to provide to payers in case any ambiguity surfaces.

According to section 1862(a)(1)(A) of the Social Security Act, Medicare will not cover services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

15. Failure to obtain prior authorization

Some contractors require you to obtain prior authorization from another doctor before you perform a procedure or provide service to a patient. Even then, if a clinician fails to submit his claims in due time, submits an incorrect form or goes beyond the bounds of medical necessity, his claims will be rejected.

16. Services provided which aren’t covered by the payer

It is a commonality for covered services to change with time. A service that was originally paid by the contractor could be eliminated. This is the reason why it is important to check the eligibility of a service before providing it. Inability to do so could cost you the service on your own expense.

Final Words:

In the fast-paced environment of a clinic or a hospital, it is quite customary for mistakes to surface. Even though errors are quite common in medical bills, a care provider should never get used to them because this practice could put his medical office into jeopardy. The handiest way to go about tackling these errors is to identify common mistakes that lead to claim denials. Above we have 16 common medical billing mistakes that lead to claim denials. By going through them you can analyze the mistakes your billing officers make which cause denials.

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