Preventing Insurance Claim Denials

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November 30, 2016 | Aptus Associates

Medical billers and office managers face the possibilities of denials from insurance companies on a regular basis. Denials can affect revenue and cash flow along with how efficient the organization is operated. An average of 5 to 10 percent of all medical practices deal with claim denials, leading to an appeal. In other cases, the denial can be reworked and resubmitted for another opportunity to get the decision reversed. The success ratio for a claim reversal ranges from 55 to 98 percent. On the other hand, 1 to 5 percent of the claims leads to being a write-off for the medical organization. But, denials can be avoided by following important steps and establishing benchmarks.

Create a plan

A medical billing office or rural health clinic office manager should develop a plan focused on denials. Determine the rate of denials that your clinic has been getting and aim for a lower rate. Ultimately, the rate of denials shouldn’t be any more than 4 percent. Notice the mistakes most often made and create guidelines or checklists to help billers avoid denials.

Analyze demographics

Make sure that all fields are filled out on the paperwork. Even one blank field could lead to a denial with some insurance companies. See that all demographics are correct and filled in including the patient’s social security number and plan code. These type of mistakes lead to almost half of all claim denials.

Avoid duplicate claims

If you resubmit a claim that has already been sent in, both could be denied. Duplicated claims make up 32 percent of all denials so making sure one person handles all accounts by a patient, doctor, or certain time frame or keeping a detailed list of claims being submitted can help avoid some of this confusion.

Coverage and limits

When the patient is not covered for a procedure or visit by their provider or have lapsed insurance policies, the claim will be denied. This can be avoided by checking all of that information before the service is provided and/or before the paperwork is submitted. Check details about insurance eligibility or limitations. Having someone double check information, as time-consuming as it may be, could save a claim from being denied Some claims require the medical claim to be submitted within a specific number of days. A good biller will know this information and be sure to claim appropriately.

Following all of these steps can help reduce the number of denials on insurance claims for medical billing providers. This will help increase revenue and cash flow while reducing the need for appealing or writing off the claim. And time is money!