Two of the biggest obstacles affecting your practice’s revenue cycle is insurance claim denials and rejections. And unfortunately, the terms “claim denials” and “claim rejections” are often confused and used interchangeably. It’s so important to understand the differences between these two terms, since misunderstandings can result in a negative impact on your practice’s revenue cycle. Here’s a closer look claim rejections, claim denials, reasons they occur, and some helpful tips for improving your practice’s claim rejection and denial rates.
What are Claim Rejections?
A claim rejection occurs when a claim doesn’t meet specific formatting or data requirements and they cannot be processed as submitted by payers. These claims don’t get processed because they’re not considered to be received by the payer. Put simply, this means that these claims have to be resubmitted after errors have been corrected. Rejections can occur due to very simple errors, such as a misspelling in a name or a missing or transposed digit in the patient’s insurance identification number. In many cases, these errors can be correctly very quickly.
What are Claim Denials?
A claim denial is very different from a claim rejection. Denied claims are actually received and then processed by the payer. However, a negative determination is made. You cannot simply resubmit these claims. It’s important to research why the claim was denied so a reconsideration request or appeal can be written. Failing to submit a reconsideration request or appeal request when resubmitting the claim will likely result in it being denied as a duplicate claim. This costs you more money and time as the claim sits unpaid.
Common Reasons for Claim Denials
Before your practice can figure out how to best avoid claim denials, it’s important to understand some of the most common reasons claims are denied. Some common reasons for claim denials include:
- Duplicate Claims for a Service – This occurs when claims are submitted multiple times for the same service, provider, date, encounter, and beneficiary.
- Missing Information – Sometimes a denial occurs because of missing information. A field may have been left blank, the social security number could be missing or incorrect, or it could be missing modifiers.
- Uncovered Services – Certain services are not covered by payers. Claims submitted for uncovered services end up being denied.
- Time Limit for Filing Expired – You have a certain amount of days after the service to report the claim to a payer. If you submit a claim outside of this time period, it will end up being denied.
- Un-bundling Services – Denials may occur if the benefits for a specific service are included within another procedure or service.
Other potential reasons for denials include:
- Coverage termination
- Required precertification or authorization
- Coordination of benefits
- Bill liability carrier
- No referral on file
Tips for Improving Claim Rejection and Denial Rates
Since rejections and denials can cost your practice a lot of money over time, it’s important to take measures to manage these problems, improving your claim rejection and denial rates. Start implementing the following tips to manage your practice’s claims denials.
- Tip #1 – Educate Staff to Improve Patient Data Quality – Since inaccurate date or incomplete data is a common reason that denials occur, it’s important to educate staff to improve the quality of patient data. Train staff and implement practices that require staff to check registration data for accuracy, completeness, and consistency.
- Tip #2 – Track and Analyze Trends – Tracking and analyzing trends in payer rejections and denials is also important. Track, measure, and report trends by procedure, payer, department, and doctor. Doing this allows your practice to categorize rejections and denials so you learn where problems are. Once you find the common problems, you’re best able to fix the issues quickly.
- Tip #3 – Work with Your Payers – Start working with your payers to talk about, eliminate, or discuss contract requirements resulting in denials that are regularly overturned. See if you can negotiate your contracts to deal with these issues.
- Tip #4 – Have a Denials Prevention Mindset – Make sure that every part of your practice has a denials prevention mindset. This should include case management, coding, patient access, patient accounting, medical records, providers, and compliance. When everyone works together to prevent denials, practices see rejection and denial rates go down.
- Tip #5 – Work with a Medical Billing and Coding Experts – One of the best ways to optimize claims management for your practice is to begin working with medical billing and coding experts. Outsourcing your billing and coding can help you quickly resolve problems with rejections and denials, lowering rejection and denial rates and helping you boost your practice’s revenue.
M-Scribe offers professional medical billing and coding services to ensure your practice’s revenue cycle keeps moving. We’ll work with you to resolve issues with rejections and denials. Contact M-Scribe today to learn more about how we can help your practice manage claim denials today.