When you're in the healthcare business, seeking reimbursement from patients' insurers is a big, big part of your existence. Healthcare organizations and physician practices spend, what seems, ever-increasing amounts of time tackling the billing process.
The challenge has become to not only get a clean and accurate claim out the door as quickly as possible, but also staying abreast of denied claims and meeting strict adjustment claim and appeal deadlines.
And all of that time adds up. The Medical Group Management Association (MGMA) has estimated that the cost to rework just one claim is $25. And assuming that the average practice has a 5 percent annual denial rate, as some data suggests, you're talking about potentially tens of thousands of dollars in delayed or lost revenue to boot.
The real kicker though? Many of these denials are preventable.
Preventable Errors Abound
According to the American Medical Association's (AMA) National Health Insurer Report Card, many of the reasons claims are denied or rejected are actually preventable. Five of those reasons are listed below:
1. Missing Information
If the claim is missing any information, whether that is the patient's Social Security number, a modifier, or the physician's NPI, the payer will likely reject the claim. In theory, electronic billing software should catch these errors before the claim releases, but glitches can and do occur. Besides missing information, the claim may also have incorrect information. Transposing numbers in a patient's date of birth or age, for instance, can trigger a denial as well and this error is less likely to be caught by billing software.
2. Duplicate Claim or Service
Duplicate claims are one of the top billing errors for patients with Medicare. Submitting these claims and waiting for the denial cost both time and money for the practice and Medicare. It can also open you up to fraud investigations or being labeled as an "abusive biller," which adds yet another layer of expense.
Keep in mind that the following matching line items on two or more separate claims can trigger a duplicate denial:
· HIC Number
· Provider Number
· From Date of Service
· Through Date of Service
· Type of Service
· Procedure Code
· Place of Service
· Billed Amount
3. Bundled Services
If your billers are splitting out services that should be bundled together, this denial will occur. Closely following the information laid out in the National Correct Coding Initiative Edits (NCCI) can help prevent these errors in the first place.
4. Timely Filing
Each payer has a deadline for claims submission, typically within a certain number of days from the date of service. Specific deadlines for adjustment and appeal filing must be followed as well. Failure to manage timelines wisely can result in denied claims and lead to unnecessary write-offs.
5. Non-Covered Charges
These denials are largely avoidable by verifying the patient's coverage for pre-scheduled services prior to the date of service. With this information accessible via phone and online, the eligibility verification process should be relatively straightforward. At the time of service, the payment can then be collected from the patient, immediately increasing the available revenue and improving cash flow.
Prevention Is Key
Unless denials are consistently tracked, perhaps by a revenue cycle management program, then it can be difficult for practices to actually implement the necessary preventative measures. Such measures may include additional training for front desk staff to ensure demographic and insurance information is accurately captured and increasing upfront collections of non-covered services. Both of those can go a long ways toward freeing up trapped claims money and minimizing the time spent on claims rework.