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Improve Medical Billing Process by Reducing Insurance Denials

February 1, 2018

Insurance Denials.jpeg

Insurers can deny payment for many reasons, especially denials resulting from the payer’s claims process and rejections from the payer’s pre-adjudication clearinghouse rejections. These causes are easy to determine in some cases, but others require a deep understanding of the insurer’s payment policies. Healthcare providers who are seeking to improve their workflow in 2018 should implement medical billing process that identifies denials and provide the evidence needed to get them reversed. These processes are essential for obtaining payments in the short term and promoting the practice’s long-term financial success.

The methods for reducing insurance denials may be grouped into the following five categories:

  • Patient Admission

  • Patient Insurance Eligibility

  • Authorization requirements

  • Medical necessity Policy

  • Accurate Medical Coding

Patient Admission at the Front Desk

The most important task for receptionists in a medical practice is to capture the patient’s health information, as most denials are the result of errors that occur during admission. Accurate insurance and demographic information is particularly important, since many denials are based on problems in these areas. Furthermore, practices often must write off these denials because the time needed to correct the claim typically prevents it from being re-filed by the payer’s deadline.

Checking Patient Insurance Eligibility 

Insurance ineligibility is the most common cause for a claim denial. These denials are typically the result of a lapsed insurance policy or the patient’s failure to inform the practice of a change in policies. Practices can avoid these denials by always confirming the patient’s coverage and benefits eligibility with the insurer before providing treatment. They should also integrate coverage verification into the practice’s workflow to minimize the practice’s risk of future denials.

Authorization Requirements

All staff members need to understand each insurer’s minimum authorization requirements and exceed them when possible. Documentation is particularly important for avoiding these denials, which is significantly easier when authorization is an online process. Regardless of the specific method used to obtain authorization, all correspondence must be kept in the patient’s file. In the case of telephone conversations, the practice’s staff member must take copious notes, including the call’s reference number, time and date. The name and extension number of the payer’s representative are also essential information when documenting the authorization process.

Medical Necessity Policy

Practices should also understand each payer’s medical necessity policy, as these can vary greatly. A denial based on medical necessity may require a practice to perform a range of actions, depending on what the contract with the payer allows. These actions could include the discontinuation of treatment, writing off the charges or obtaining payment from the patient.

Practices should determine if the payer has any policies that will identify a potential denial based on a lack of medical necessity before performing any services. Some payers also have an appeal process that could result in payment if the appeal is successful. This process can often be expedited with a three-way call between the practice, patent and insurer.

Accurate Medical Coding 

An incomplete understanding of a payer’s coding policies is often the cause of a claim denial. These policies are particularly variable in areas such as the payment for unlisted procedures and payment reductions for multiple procedures. A practice’s staff should be especially knowledgeable about coding policies related to the services most commonly performed by the physician. A payer may also have policies that deny payment for a service because the payer considers that service to part of another procedure. Denials based on the payer’s coding policies also occur when the payer fails to follow prevailing coding guidelines, especially in areas such the correct coding initiative and the recognition of modifiers.


M-Scribe Technologies, LLC is a national leader in medical claims, including auditing, billing and coding. We can help you avoid claim denials and other billing problems. Contact us at 770-666-0470 or to find out what we can do for you.


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