In Healthcare Revenue Cycle Management, the common meaning of a medical billing denial is, when the insurance carrier refuses to pay for a medical claim/bill submitted to them for the healthcare services.
As a practice owner or administrator, you should know very well what these denials can do to the financial health of your independent medical practice. Well, your revenue gets locked in the Accounts Receivable causing you great pains with your cash-flow, revenue and operational efficiency.
For independent medical practices, denial rates typically range around 7-12%, however for better performing practices this drops down under 5%. Though at Cosentus we have seen practices struggling at about 15-20% as their billing is not optimized, and they lack in expertise and necessary technology. Just so you clearly understand what the significance of these denials is, a 12% denial rate means one out of 8 medical claims will have to reworked by billers or coders and/ or appealed. The cost to rework these claims can add up and dent your revenue significantly.
A vast majority of these denials are caused due common mistakes with coding and billing and can be totally avoided. So, it becomes important to take a closer look at what these mistakes are how could they be avoided.
Top 6 medical coding and billing mistakes
Claim Lacks Necessary Information
The insurance carriers like claims that lack information, because it is really easy for them to deny payment on such claims. Billers sometimes leave out information like date of accident, or get the gender of patient wrong, now these things are minor, but it is enough ground for the insurance carrier to deny a claim and not make payment. Be sure to scrutinize your claims for missed fields, incomplete information or lack of supporting invoices or documentation. The insurance can still find other ways to deny the claim but as a medical biller it is our job to make it really hard for them to deny our claims.
Claim Sent To The Wrong Payer
The coverage information can change anytime for a patient, so it is critical to verify eligibility every time the services are provided. Billers need to make sure the patient’s coverage has not been terminated, benefits have not been maxed out, the services being provided are covered under the plan type, if the patient has a HMO plan and if yes where should be claim be send to. Billers also need to make sure if the patient has Medicare part C coverage then they identify the correct Medicare HMO to send the claims to.
Understanding the patients plan and services being provided is very important, some plans have a capping for certain types of service. A proactive approach here can save denials and the cost involved to work these denials. Also, there will be lesser disruptions to the cash flow.
Referral or Prior Authorization not obtained
Payers require obtaining referrals and/ or authorization for performing certain services. While referral is the patient’s PCP (primary care physician) sending him to another provider, authorization is the payer consenting to certain medical services being performed. A referral or Authorization is still NO guarantee for the claims to be paid, as the claim needs to further have medical necessity supported by proper documentation and the claims should only be filed in the name of the provider for whom the referral or auth was issued.
Duplicate billing is one of the most common mistakes made by billers. It is possible that the doctor and the nurse both made a note of the same medication and that does not mean the medication was actually provided twice and needs to be reimbursed twice by the payer. When the biller fails to identify this and ends up putting the medication charge twice, the payer can not only deny the second charge they can put the whole claim on hold and ask for documentation, now this is going to delay the payment and also involves cost for this claim to be reworked again. Same thing with the nerve blocks, if there are two CVPs mentioned, you got to make sure what the site was and what was the purpose for two CVPs, if they are just the duplicate of each other and some how got entered twice on the “super bill” you should avoid billing it twice. Also resubmitting claims prematurely is another big reason for the payer to deny as a duplicate claims, you got to give the payer time for processing the first claim that was submitted and if you do not see a response within the expected time frame it is important that you check on the status of the first bill before resubmitting the claims again, as the payer may not process the first claim and just deny the second one as a duplicate. It is a wastage of time, effort and money and causes a lot of problems.
Upcoding OR Unbundling
Up-coding is the practice of billing higher levels of code for better reimbursement than the services performed. While you may sometimes get lucky, but this is neither compliant nor the payers are going to be fooled by this. This kind of up-coding practice can get you a lot of denials and seriously impact the cash flow of the practice. Also, the payer in some cases can flag you for a pre-payment audit and that can cause serious delays in the processing of claims.
Un-bundling refers the practice of submitting multiple bills piecemeal to maximize reimbursement for tests or procedures that are required to be billed together. Doing this by adding modifier does not make this practice acceptable or even legal. Medicare reimburses surgeries based on a package of care (global package), please check with the LCD and CCI to make sure you are billing CPTs that are separately reimbursable.
Both these practices of up-coding and un-bundling causes more pain than gain. As a biller it is your job to identify and help physicians understand what is payable and what is not.
Check out: 6 Tips to Optimize Medical Billing for Maximized Collections
Lack Of Specificity In Coding
Each DX code must be coded to the highest level for that code and should be totally in sync with the documentation, if these is a mismatch, the medical charts need to be referred to and if there is a need speak to the physician with tips on how they could better document the services rendered so you can capture the full efforts of the physician while coding for the service and ensure optimal reimbursement for your provider. As an example, if the patient was given crutches and was also trained for how to walk properly with the crutch, this needs to be indicated in the charts by the physician, and the biller should be able to code for Gait training and ensure the provider gets paid for the time he spent training the patient. However, as a biller or coder if you do not see this being documented along with a specific number of minutes then you should discuss this with the physician instead of still just going ahead and billing for the Gait training.
These are some of the most common medical billing mistakes that medical billers and coders can make, causing a lot of avoidable denials. There are other mistakes that you should try and guard against, like not filling the claim within the payer specified filing time frame, not following the payer guidelines when billing to a specific payer, some payers have different preference for modifiers they may accept 50 or ask for LT and RT , if you choose the wrong combination it gets you a denial and potential loss of revenue.
Medical billing and medical coding is a specialized job and must only be done by the specialists. Cosentus has a big team of seasoned medical billers and coders who have been services anesthesia, ortho, pain management, ASCS, urgent care, family practice and obgyn among other specialties. Our deep domain expertise and technology enables us to fully optimize your billing and ensure maximized reimbursements for your practice.
Talk to a Cosentus representative today about a FREE comprehensive analysis of your billing and coding. You will get all the answers you need about the state of your billing and a road map for increasing revenue. This knowledge is a great tool in your hand and enables you to question the various aspects your healthcare revenue cycle and ensure it is fully optimized.