The U.S. Department of Health and Human Sciences has finalized October 1, 2015, as the compliance date for healthcare providers, health plans, and healthcare clearinghouses to transition to ICD-10. With this deadline looming ahead and the Centers for Medicare and Medicaid Services (CMS) predicting a doubling in Medicare denials for the following 6 months for 1 in 5 practices, understanding and controlling denied and rejected claims has never been as critical as it is now. To minimize the impact of ICD-10 on the revenue cycle of your practice, it is imperative to invest time in understanding rejections and denials and come up with a management strategy to curtail them.
Claims that are deemed non-payable by an insurance company are deemed denied claims. The reason for the denial is usually given in an explanation of benefits (EOB) statement. Common reasons for claims being denied are missing information, coverage miscalculations, and billing errors. Although denied claims can be appealed, it saves time and money to avoid them altogether.
Rejected claims are sent back not because the insurer deemed them non-payable, but because they were concluded to be essentially erroneous. If your billing software provides incorrect or contradictory information that your billing staff fail to detect, the claim will, in all likelihood, be rejected. Rejected claims can often be corrected and re-submitted, but as with denials, preventing rejections is of course preferable.
The most common flaws leading to denials and rejections are often the most fundamental and include errors in medical provider information, patient information, diagnosis, and point-of-service codes. When the treatment and diagnosis codes don’t match, the claim is likely to be rejected or denied. Insurance companies are exacting in their demands, and a dynamic and flexible medical billing software capable of meeting the fluctuating demands of various insurers is a wise investment.
To ensure the correct codes are entered into claim forms, good communication between the clinicians and the billing and coding staff is crucial, as is communication with the insurer. Patient coverage should be verified at the time of making an appointment or at the very least when the patient signs in. Attention to keeping patient contact information up-to-date is also important. It takes constant alertness and diligence at all steps of the process, from appointment booking to claims submission, to keep error rates and denials and rejections at a minimum.
Any unexpected or sudden upswing in denials and rejections should be investigated. Analysis can help pinpoint if claims made to one particular insurance company are rejected more often or if a particular diagnosis code leads to more denials. New rules and regulations may have gone unnoticed and could be leading to increased rejections, and bringing to light the reason for increased denials and rejections can help you substantially increase uninterrupted payment of claims.
Investment in a good medical billing software and vigilance at every step of the way can greatly reduce lost revenue from denied and rejected claims. Maximizing profits for your practice will require the services of revenue cycle management experts to identify weak points in the cycle that could be leading to denials and rejections. Improvement at all levels of the revenue cycle can increase clean claims, boost profitability, and avoid cash flow interruptions