Common Culprits in Medical Claims Rejections
Even the most experienced medical billers make mistakes once in a while. Sometimes insurance companies try to pull a fast one. In either case, every medical practice gets some claims rejected. Here are some of the most common culprits in medical claims rejections:
- Time: The majority of insurance companies allow providers between 60 and 90 days from the date of service to file a claim for reimbursement. Missing this deadline is a surefire way to end up with a rejection. It is vital that the patient’s complete insurance information is on file, even if the insurance does not pay for services provided. The claim should first be submitted to the patient’s primary carrier and then the EOB (explanation of benefits) should be sent to the EDS (electronic document services).
- Codes: Missing, invalid, or incomplete diagnostic ICD-10 codes are another common reason that medical claims are rejected by the payer. The code for the service being claimed should correspond to the treatment received by the patient. Expert billers can ensure that each claim submitted to the insurance company is a clean claim.
- Lost Claims: Sometimes a claim falls through the cracks at the insurance company, and when it finally makes it into the system, it has missed the deadline and is denied. It is therefore important for medical practices to follow up on unpaid claims and ensure they are paid on time.
- Preauthorization: Many insurance plans require preauthorization for certain treatments and procedures. If services are rendered without obtaining proper preauthorization, this can lead to the claim being rejected. Front desk staff should be trained to submit preauthorization for all services that the clinic offers and for which the patient’s insurance company requires prior permission.
- Referrals: In addition to preauthorization, some insurance companies require a referral for the treatment from the patient’s primary care provider. If services are provided without the relevant referral in place, this is cause for denial of the claim. Again, the staff at the medical practice should be aware of the rules and regulations of different providers and should ensure referrals are in place before services are rendered.
- Multiple Services: Insurance companies have a strict policy with regards to behavioral health where only one service is permitted per day. Therefore, if a patient is authorized to receive 12 therapy sessions and two sessions are claimed on the same date of service, the provider will only receive payment for one of the sessions. It is important for practice staff to be aware that group therapy, medication review, and psychological testing sessions are all included in the one service per day rule.
- Authorization: Some insurance companies authorize a limited number of sessions or treatments for a medical condition, and once this number is reached, further treatments or sessions are not covered. Sometimes there is a time duration (as short as 30 days) for treatment authorization. In either case, once the authorized number of sessions or time duration expires, the claim can be denied.
- Changes in Insurance Plan: When a patient changes their insurance plan, a provider may not be on the network of the new plan or may need to get preauthorization from the new plan before treating the patient. The insurance company is not liable to pay for any services provided prior to completing these actions. It is important, therefore, for staff at the practice to keep the patient’s insurance information up-to-date.
- Lost Insurance Coverage: Once a patient’s insurance coverage has lapsed, any services you provide are not covered and will be denied. Patients may be unaware that they have lost their insurance or they may not inform the practice of lost coverage.
- Late COBRA Payment: The COBRA program is a government initiative that permits people to keep their insurance in the event that they should lose their job. However, individuals wishing to benefit from this program need to pay 100 percent of their policy premium. This is not always easy for people who are unemployed. If services are rendered to patients who are behind on COBRA payments, the claim will likely be rejected.
- Managing Company: Many insurance companies delegate claims management for a few services or all services to third-party companies. If your office staff are unaware of the correct managing company for a payer and send the claim to the wrong one, the claim will be denied.
- Panels: As a provider, you need to be paneled with the insurance companies that cover your patients. It sounds simple enough, but with mergers happening ever so frequently, there are instances of many different panels within one company. Also, when a provider changes employers, he or she may continue to think they are on the panel of an insurance company but this may not be true because the contract was actually between the old employer and the payer.
- Location: When a provider is paneled with an insurance company, the practice addresses where services will be provided are listed. If services are provided at any other location other than the listed addresses, it can lead to claim denial.
- Out-of-Network Benefits: Certain benefits are out-of-network benefits. Patients have a greater responsibility to pay for these services. For example, additional deductibles may need to be met. It is important for the billing staff to correctly calculate the actual amount payable by the patient and collect this at the time of the encounter. Failure to do so may result in the provider never getting paid for services rendered.
- Dual Billing: Certain services are only covered once in a particular timeframe. For example, a behavioral health intake appointment may be only payable once a year. If a patient has already seen a therapist within the past year and that therapist has billed for an intake appointment, your claim may be denied.
- Out-of-State Insurance: Even for insurance companies that you are networked with, if the patient’s plan is out-of-state, then your reimbursement may be denied or you may receive reduced reimbursement.
It can be incredibly difficult for in-house billers or overworked front desk staff to keep track of these various sources of error. You can say goodbye to denied claims and get paid faster by outsourcing your medical coding and billing needs to an expert end-to-end solution provider.