With healthcare administrative costs making up approximately thirty percent of all medical bills received in the United States, it’s crucial that each claim filed adheres to the specific requirements of the insurance network it’s being sent to. Understanding these requirements prevents lengthy correction times, excessive paperwork, and frustration for providers, payers, and patients. Understanding the reasons a claim may be denied can help reduce the number of denials received by a provider’s office and the patient. Read on to learn more about four common causes of medical claims denials.
Incorrect Patient Identifier Information
When it comes to assessing the cause of a denied claim, the answer could be as simple as a name or birth date error within the submitted paperwork. Although this unintentional typo may seem minor, any discrepancy with the information on file with the health plan can result in the medical claim being denied.
Common errors that can lead to claim denials due to incorrect patient identification information include:
The patient's first or last name is incorrectly spelled.
The patient's date of birth on the claim doesn't match the health insurance plan.
Missing or incomplete patient information was submitted.
Coordination of Benefits
Coordination of benefits (COB) is a term used when a patient has two or more health insurance plans in their name. Certain rules typically apply to determine which health insurance plan pays the primary or secondary amount for medical expenses. There are several guidelines that every physician’s office must follow to determine how much to bill each health insurance plan the patient has. Proper coordination and understanding of the payer/provider rules of engagement speeds up this process resulting in proper funding being allocated quicker and more efficiently.
Missing or Invalid Billing Codes
Accurate medical documentation is a critical aspect of billing within the revenue cycle process in the healthcare industry. Providers use these detailed medical records to validate their reimbursements to payers when a conflict with a claim has been issued. In order for medical claims to be processed correctly, there are standard codes used to identify services and procedures. If these codes are not correct, the medical claim for that specific service will be denied.
“Utilizing the appropriate billing codes accurately describe the service that was provided to the patient. Applying the correct codes to the claim will ensure regulatory compliance,” Michelle Kuhlmann, Revenue Cycle Manager at Signature Performance, said. “Maintaining accuracy in reporting the appropriate CPT/HCPC codes will result in accurate billing and proper reimbursement for healthcare facilities. Inappropriate use of CPT/HCPC codes can cause a delay in reimbursement, underpayment, overpayment, claim denials, and higher administrative costs.”
HCPCS codes are updated periodically as new codes are developed for emerging procedures and existing codes are revised or retired. Ensuring documentation accuracy before submission to payers helps maintain a smooth revenue cycle and minimizes healthcare administration costs.
Referral or Pre-Authorization was Required or Expired
If you have recently undergone a medical procedure and had your medical claim denied, there is a chance that a referral or pre-authorization was required before undergoing the procedure. If you did receive a referral or pre-authorization, the authorization request may have expired. Insurance companies generally give physicians a set timeframe before the authorization approval runs out. If care is received after that allotted timeframe, the claim will be denied.
When providers and their staff are burdened with navigating insurance requirements, submitting forms, and managing prior authorization requests over the phone, they have less time to dedicate to their patients, which can reduce accessibility to care. A streamlined pre-authorization process eliminates rework and impacts not only the administrative cost but also improves the quality of care and overall health outcome for the patient.
Dedicated to Reducing Healthcare Administrative Costs
Knowing the different reasons a claim may be denied can help minimize the number of denials experienced by both the provider’s office and the patient. Signature Performance is well-positioned to strengthen the relationship of providers and payers by bridging the administrative gap between these two critical healthcare services.
At Signature Performance, our unmatched experience on both the payer and provider side of the business allows our team the opportunity to evaluate some of healthcare’s largest challenges from a variety of perspectives and create tailored solution that get to the core of our client’s pain point. We believe the healthcare industry in the United States deserves only the best, and that sentiment is what motivates our dedicated team to do our very best every day.
To learn more about Signature Performance, contact our team today.