Home » Blog Articles » Aged accounts » Medical Billing: 5 Reasons for Denied Claims & Ways to Prevent Them

Denied insurance claims and aged accounts are a major pain point for some medical centers and healthcare practices. Here are some reasons for the generation of denied claims as well as a few ways to avoid them.

A missing detail or improper modifier creates an issue. However, sometimes medical back offices will need to conduct additional research. Here are some common situations that can generate denied insurance claims:

5 Reasons for Denied Claims:

Reason 1 – Lost or Expired Claim:

Sometimes, insurance claims are simply misplaced or lost, so they are never submitted for payment. Medical offices also need to pay attention to the timely filing limit for each claim. Otherwise, the deadline for submitting the claim for payment will have expired.

Reason 2 – Improper Provider Credentials:

Proper insurance credentialing is required for health professionals. Otherwise, claims submitted by a medical office are rejected or considered out-of-network. Yet, many clinicians find credentialing to be a confusing and time-consuming process due to the amount of questions and unfamiliar terminology such as PECOS or revalidation.

Reason 3 – Missing or Expired Preauthorization:

A preauthorization or prior authorization is one to the first steps that in the RCM process. For many healthcare procedures, a preauthorization is required by the patient’s insurance provider. If a medical claim is submitted to an insurance payer that was not previous authorized, it will likely be rejected as an unauthorized claim. Some prior authorizations also have an expiration date. If medical services are provided within the approved time frame, the medical procedure is denied by the insurance provider.

Reason 4 – Changes in Patient’s Eligibility:

Sometimes a patient’s health insurance information changes, but the medical provider is not informed of these changes. This means that any claim using the patient’s old or incorrect insurance information could create a denial. When patients change health plans, they will need to obtain a new preauthorization for their treatments or procedures. Common pieces of data where mistakes may occur include the policy number, patient’s address, DOB or ID number.

Reason 5 – Incorrect Billing Codes:

To error is human, so sometimes a medical center’s back office staff will mistakenly enter the wrong billing code or use an incorrect modifier. Incomplete or missing ICD-10 or CPT codes will led to denied or reject claims. If these mistakes are not caught and resolved, medical offices can quickly find themselves dealing with a backlog of unpaid insurance claims. On other occasions, codes were updated, but the office is still using the older versions.

General Advice For Preventing Denied Claims:

Healthcare providers should monitor their accounts and look for bottlenecks in the claim’s submission process. If after 60 days a claim is still outstanding, follow up with the appropriate insurance payer is needed. Once the status of the claim is verified, medical office staff need to record the claim number and expected date of payment. If payment has been rendered, healthcare providers should record the transaction number, date of payment and amount paid.

The specific details of a patient’s insurance details require special attention. A variety of factors can influence insurance coverage and network status. Everything from copayment, deductibles and secondary v. primary insurance can all influence the status of a medical claim. Every healthcare facility needs to closely monitor prior authorizations, patient demographics and the credentialing status of their staff. Otherwise, a lack of administrative oversight in these areas can quickly create problems for a medical center’s revenue cycle.

Outsourcing Billing Tasks:

Medical offices sometimes struggle with staying on top of their medical billing requirements. In previous decades, there was less paperwork and regulation guidelines to follow. But now back offices must comply with an increasing amount of regulation and policies. At the same time, they need to properly utilize a PM, EMR as well as other computer systems.

Healthcare professionals are trained to focus on patients, not payments and financials. For these requirements, it makes more sense to outsource this function to companies that focus only on these tasks. The fact an organization exclusively focuses on medical billing tasks means that they become very proficient at submitting and monitoring insurance claims.

They have staff who are dedicated to corresponding with numerous insurance payers on a daily basis. They are familiar with a variety of billing systems, clearinghouses and EHRs. Through volume repetition, their medical billing staff is more knowledgeable and efficient at optimizing reimbursements and avoiding obstacles. When problems do arise, they have the ability to make extensive phone calls and emails in order to find a solution.

An experienced medical billing company can also track and prevent aged accounts as well as detect other areas of revenue leakage in a medical office’s billing procedures.

About Our Company:

Advanced Billing & Consulting Services (ABCS RCM) provides experienced medical billing, credentialing and web design/PPC services for medical centers. They understand the complexities of healthcare revenue cycle management. For additional questions about our services or other related topics, please contact ABCS RCM.

To learn more, email or call them at 614-890-9822 or 866-460-2455.

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