Top 5 Reasons for Medical Billing Denials and How to Prevent Them

The Top 5 Reasons for Medical Billing Denials and How to Prevent Them


Manual errors, input omissions, and timing concerns could be instigating more denials than you realize. Keep an eye on these collective reasons for insurance denials to see if you can constrict your billing approach and reduce your rate of denials.

Denials fall into two distinct buckets: soft and hard. Hard denials cannot be corrected or reversed and result in written-off or lost revenue. Soft denials are provisional denials with the potential to be reimbursed if the provider amends the claim or sends further information. Here are the top 5 explanations for medical billing and coding services denials, as reported by the 2013 American Medical Association National Health Insurer Report Card.

Missing Data

Leaving just one required field on a claim form blank can elicit a denial. Technical and demographic errors, which could be a missing modifier, no Social Security number, or the wrong plan code, cause an immediate 61% of initial medical billing denials and explain 42% of denial write-offs.

Already Resolved Service

This blunder occurs when benefits for a certain service are encompassed in the allowance/payment for another procedure or service that has already been adjudicated.

Duplicate Service or Claim

Duplicates, which are entitlements resubmitted for a single encounter by the same provider on the same date for the same beneficiary for the identical service item, are among the leading reasons for Medicare Part B claim denials (reaching a cumulative 32%).

Not Insured by the Payer

Medical billing denials for procedures not provided under patients’ current benefit plans can be prevented by checking details in the insurance eligibility response or calling the insurer before delivering services.

Expiration of Filing Limit

Most payers necessitate medical claims to be submitted within a specific number of days of service. This comprises of the time it takes to process rejections, whether it was automated review (system edits to check for inappropriate coding or other errors) or complex (licensed medical specialists determining if the service was covered and was necessary and reasonable). Correcting inpatient medical coding faults, which were held responsible for 81% of complex claim denials, can cause delays that push medical billing away from the deadline. Workflow practices need to alert staff when medical claims reach the time limit.

While developing denied medical billing claims after the fact is a crucial constituent of revenue cycle management, depending on this alone can disrupt cash flow to dangerous levels. A much sounder financial tactic used by top medical coding companies in USA is to proactively measure the causes and volume of denied medical billing claims so they can be avoided before they occur.


Preventing the Medical Billing Claim Denials – Useful Insights

Adding more people to the healthcare claims denial management team won’t inevitably help prevent or reduce denials unless they know what to focus on. The following medical coding solutions should be part of any sound denials management strategy:

Quantify and Categorize Denials

By measuring, tracking, and reporting trends by department, doctor, procedure, and payer. Analytics and technology and are essential to consistent business intelligence. However, they are well worth the investment and time.

Improve Patient Data Quality

at admission, which is the source of many faults and ultimately, denials.

Create a Task Force

To prioritize and analyze denial trends, determine what resources are required to implement solutions, and track and document progress.

Prevent Incorrect Assumptions

and determine the exact details for denials by reaching beyond generic coding explanations and executing root cause analyses.

Develop a Denials Prevention Mindset in all Fragments of the Revenue Cycle

including case management, patient accounting, medical records, contracting, coding, compliance, and patient admission.

Improve Claims Management Software

To help guarantee edits are functioning, current and refining your clean claims rate. Your vendor needs to provide clean claims rate data frequently and tips to improve it tailored to your organization.

Use Automated Predictive Analytics

to flag possible denials and address them before claims are submitted.

Collaborate with Payers

To eradicate contract requirements that frequently result in denials overturned on appeal. Yet again, data analytics can help recognize trouble spots and sustain negotiations.

Efficient And Cost-Effective Denials Management

Many hospitals and medical facilities lack the staff and technology capacity to manage denials successfully, particularly in light of continually changing regulations and payer guidelines. Outsourcing revenue cycle management to companies that provide medical coding consulting services like YES HIM Consulting,who have skilled denials management teams can be a sustainable, profitable alternative. We can help you attain medical billing benchmarks, decrease backlogs, recognize the root causes of denials, and expand your revenue cycle team.

YES HIM Consulting

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