Minimizing insurance claim denials is critical to the financial wellbeing of your medical practice. It has a direct effect on the business’s cash flow. Unfortunately, to obtain payment, providers have to jump through countless hoops.
Providers who don’t have denial reduction measures in place will see a high percentage of insurance denials. In this article, we will share with you seven ways that you can minimize insurance denials and maximize your revenue.
Verify Insurance Coverage
One of the most common reasons that claims are denied is that the patient’s coverage was not active at the service date. Often, medical office staff may be busy and forget to verify health insurance coverage before the patient’s appointment. It’s crucial to verify insurance eligibility because if the patient’s coverage is not active at the date of service, the insurance company is not eligible for the charges.
When to Verify Insurance
Have you ever received an insurance denial due to no coverage after verifying that the patient’s coverage is active? This happens when the patient’s coverage status changes after you’ve confirmed the coverage is active.
So, it’s advised to verify coverage as close to the appointment date as possible – a day or two before the appointment is usually sufficient.
Submit Timely Claims
A considerable percentage of claims are denied for timely filing, indicating that the claim was not submitted on time. Every insurer has set rules for claim submission timelines, and if these rules are not followed, the insurance company does not have to pay.
It is wise to get familiar with the timely filing deadlines for all of your payers. Keep the deadlines handy to make sure that claims are filed on time.
It’s also advisable not to wait to submit claims to the patient’s insurance. Submit claims as soon as you can. Also, it’s important to bill claims electronically whenever possible – paper claims can get lost in the mail and often take a long time to get to the payer.
Utilize the Correct Coding
Even if the patient’s coverage is active and you file the claim on time, the claim will be denied if the claim information is somehow invalid.
Trained medical billers and coders have the knowledge necessary to choose the correct codes for your claims. If you are billing claims without a professional biller’s help, the chances of coding denials increase.
Claims must be billed with specific codes that describe the exact services performed. There are many ins and outs associated with medical billing and coding, which makes it easy to become overwhelmed.
Hire a Medical Biller
If you’re not a medical biller, it is advised to get one immediately. Billing claims accurately has a monumental effect on your ability to request and receive payment for your services.
Also, since humans make errors no matter how experienced they are, it’s imperative to utilize billing software with a glossary of diagnosis codes, procedure codes, and modifiers. The most sophisticated medical billing systems have built-in measures to help reduce coding errors.
Also, every single year, new codes are introduced and discontinued. If your staff is not staying abreast of these changes and rules, your office may see many denials due to invalid coding.
Get Familiar with Payer Requirements
Every payer has a unique set of requirements that providers must meet for claims to be paid. For instance, when a patient has Medicaid and another policy, the non-Medicaid policy should be billed first. Medicaid is the payer of last resort, meaning that they pay after the patient’s other plans have paid. Providers who are unaware of this rule may bill Medicaid first and receive a denial.
Payer requirements may concern any of the following:
- Medical necessity – Whether a billed service is considered necessary.
- Drug formularies – Formulary and non-formulary medications.
- Guidelines concerning pre-admission testing.
- Pre-authorization requirements – Whether a pre-authorization is required for a certain service.
To avoid denials based on payer rules, ensure that your billing staff is well-versed in payer requirements.
Keep Record of Past Denials
While there is no way to prevent all denials, you can drastically reduce them by using analytical tools. If you notice a denial trend, you can take steps to correct the issue at the source.
For smaller practices, recording past denials can be as simple as creating a spreadsheet with claim information and the denial reason. But if you’re a larger practice, specialized software may be necessary for complete tracking of denials.
In addition to keeping a record of denials, it may be advantageous to appoint a denial management team. This team should monitor denials and propose solutions to minimize them.
Utilize an EMR System
Believe it or not, many claims are denied due to bad handwriting. If claims processors are not able to read your handwriting, they’ll deny the claim. They are unable to adjudicate the claim if it is illegible.
To eliminate denials due to bad handwriting, utilize an EMR system that allows for electronic claims submission. This will instantly reduce the incidence of insurance denials.
Outsource Claim Submission Functions
If your medical office staff is busy with everyday business functions, it may not be feasible to make sweeping business changes. In this case, outsourcing medical billing and denial management functions may be in the best interest of your business.
A dedicated team of experts can make targeted changes to help your medical office minimize insurance denials. And since there’s no way to avoid insurance denials completely, you may also benefit from enhanced insurance denials management.
DataSearch Inc. is a leader in medical accounts receivable, increasing revenue for hospitals and doctor’s offices through revenue cycle and insurance denial management. Let DataSearch’s 40 years of medical AR experience work on your finances while you work to heal your patients.
The sooner you take action on reducing insurance denials, the sooner you’ll see improvement in your bottom line. We hope that this article is helpful to you as you seek out information on how to minimize insurance claim denials.