Medcare (MSO) Medical Billing Services is a leading provider of healthcare analytics outsourcing services in the USA with over 20 years of experience. A medical claim denial refers to the refusal by an insurance company or insurer to pay for the cost of medical treatment that was provided to an insured person by a healthcare facility or a professional. Patients and healthcare providers are most concerned about the refusal of insurance companies to pay medical claims.
The provider’s claim approval rate is a key indicator of the provider’s financial health. It’s not surprising that when the revenue engine stops, the bottom line suffers, which can threaten the continued operation of the provider. Poor denial management services can also make it difficult for patients and cause strain on their relationships with providers.
Common Reasons for Medical Claim Denials
For a variety of reasons, insurance companies may refuse to pay for medical services rendered to insured individuals. Some of these causes are simple and easy to fix. Others require complex changes that may not be possible. Here are some of the most common reasons why health insurance is denied.
Pre-certification/authorization not obtained when necessary:
Some insurance companies require the patient and provider to obtain preauthorization before treatment begins. For special cases and procedures, the insurer may not require pre-authorization. Failure to comply by the provider or patient can result in the patient not receiving the full treatment cost.
Best practice:
It is always a good idea to ask about the policy details for patients and what they mean for providers. It is important to connect with the insurer before treatment begins in order to learn about the pre-authorization conditions.
Incorrect documentation:
Most insurance companies will deny claims if there is an error in the claim form. Common errors include misspelling a patient’s name, mistyping their date of birth, or mistyping their age. The revenue cycle can be extended by not including any crucial details of treatment, such as service codes or filing claims for incorrect diagnoses or procedures. To have claims approved in the first attempt, the diagnostic and procedure codes entered must match the actual diagnosis/procedure.
It is best to exercise caution when entering treatment details into the form. This can be achieved by leveraging the expertise of denial management firms and smart medical billing systems.
Late filing:
Each insurer has its own filing deadlines for claims that must be filed in order to have a claim approved. The provider cannot do anything to get the dues once the submission window has closed. While some things can be resolved quickly by phone or email, others that require extensive paperwork may result in rejections. Duplicate claims, i.e claims that are resubmitted on the same date and for the same beneficiary or service item, can also result in rejections or denials.
The best practice is to promptly submit claims after the services are rendered. Their billing services can notify them about the deadlines and follow-up procedures.
Expired insurance plan:
Medical claims will be rejected if there is no valid insurance. A provider may have multiple patients and may have policies from different insurance companies. They must ensure that they do not send claims to the wrong company. It is important to ensure that all the information on the patient’s policy card is correct and that they can present the documentation when necessary.
Best practice:
Providers must verify current insurance details and make sure that the treatment is covered under the policy. Certain plans require that the practitioner be “in network” to receive coverage. Therefore, it is important to take all the necessary steps to confirm this.
The services are not covered by insurance policies. Exclusions are usually included in all healthcare policies. This means that the policy does not cover certain procedures and diagnoses. This can lead to denials if the provider does not verify the information before the provider begins treatment. The provider should also ensure that all locations it operates in have been registered with carriers. Unregistered branches and locations could hinder the approval of claims.
Best practice:
Providers must distinguish between the out-of-network benefits and the in-network. Most insurers require patients to pay a higher amount for out-of-network services. This makes it important to verify the providers.
Tips to Avoid Denial of Medical Claims
Common reasons for healthcare claims being denied include incorrect or incomplete information, late claim submissions, claims not covered under the patient’s policy, delayed claim submissions, etc. No matter the reason, both the provider and the patient bear the brunt. To their relief, effective denial management in medical billing can be a significant help in avoiding financial loss. These are the best ways to avoid claim denials and maximize your revenue cycle.
The first step in recovering from high claim denials is to determine the source. To identify process bottlenecks. The most common problems are usually found in patient registration and appointment, as well as in verifying the policy terms. Providers must ensure that all documents are correct and complete without any billing or code errors.
Prioritization is key:
Providers must identify the areas that need improvement or transformation. Then, they must devise a plan to prioritize the areas according to their impact on the revenue cycle. Denial management companies are able to assist providers with a cost-benefit analysis and an ROI estimation. This will make it much easier.
Exact eligibility verification:
It is crucial to ensure that the patient’s insurance eligibility is verified before any treatment can be planned. Providers must establish a clear workflow in order to verify the patient’s insurance benefits and eliminate the possibility of mismatching them with their insurance. They can get a full picture of the patient by following a thorough checklist and exchanging information with the network/insurance company.
Precertification and authorization checks:
Nearly 18% of all medical claim denials in America can be attributed directly to authorization or precertification issues. This highlights the importance for providers of this aspect to confirm this aspect before beginning treatment. A recent study found that providers spend on average 15 hours a week handling authorization and related tasks. This can distract providers from providing the best possible services to patients. It’s wise to delegate authorization services to a denial management company to achieve better results.
Automated claims processing:
Claims can almost always be denied if there is a clear process for patient access and registration. Automation technology can help you prepare accurate claims by facilitating information exchange between the front and back office staff.
Why Outsourcing Medical Billing Services Leads to Higher Claim Approval Rates
There are two options for healthcare professionals to manage their medical billing processes: they can either rely on their internal staff or contract with an external company to provide denial management services. Due to today’s operational burden, many healthcare facilities are understaffed. Doctors and staff are also feeling extreme pressure. Patients suffer when the provider loses sight of the core areas, and revenue and reputation suffer.
Denial management services are a crucial factor for care providers. It determines the outcome of healthcare claims that they submit to insurers to receive their reimbursements for the treatment of insured patients. Medical claims management can be slow and difficult due to the manual and technical processes involved. This can lead to delays in payments, financial losses, and a poor experience for patients. The healthcare revenue cycle management ecosystem can still be highly efficient if providers exercise extreme caution at each step. Professional denial management companies are a great resource for providers. Get in touch with us to learn more about our services.
