Common Causes of Insurance Claim Denials

From inpatient medical coding errors to insufficient documentation, discover the top causes of claim denials in medical billing practice. Find out how to improve your documentation practices and avoid common pitfalls to increase your chances of getting paid for the services you provide. 

1.  Duplicate Claims

One of the most common causes of denials is duplicate claims, so organizations should be sure to review their billing practices and ensure that no duplicate entries are made. Healthcare organizations can significantly improve their financial performance and remain compliant with industry standards by taking a proactive approach to denials management. 

2.  Overlapping Services or Procedures

Another common cause of denials is overlapping services or procedures that are billed incorrectly. Organizations should ensure that they are properly tracking any related services and verifying that proper codes have been used for each service. By taking a comprehensive approach to denial management, organizations can reduce the rate of denials and maximize their financial performance. Additionally, they can improve staff morale by ensuring that employees are educated on proper coding and billing procedures.

3.  Timely Filing Limit has Expired

Very commonly, claims are submitted after they have exceeded their designated time frame for processing. Organizations must pay close attention to the time frames when submitting claims and ensure that they are submitted promptly.

4.  Procedure Not Covered by Payer

Often denials occur because the medical service or treatment is not covered by an insurance company, rendering it ineligible for reimbursement. In these cases, the healthcare provider must appeal to the payer or resubmit their claims with improved documentation that demonstrates the medical necessity to receive payment for the services provided. Healthcare organizations should be aware of which treatments are commonly covered and ensure that all necessary coding and documentation are accurate. By staying up-to-date on payer policies and developing strong communication between staff and insurers, denials due to coverage issues can be minimized.

5.  Missing Information

When important information is omitted from the claim, such as patient identification, medical history, or diagnosis and procedure codes, it will trigger a denial. Insufficient documentation may also result in missing information and lead to claim denials. To prevent these types of denials, healthcare providers must ensure that all claims contain complete and accurate information. They can achieve this by implementing standard processes for documentation, conducting regular audits to identify missing information, and providing training to staff on proper documentation practices.

6.  Coding Errors

Coding errors are one of the most common causes of denial management. Coding errors can occur when a healthcare provider fails to correctly code treatments, services, or diagnoses in medical records. To prevent coding errors, they should also conduct regular audits to identify coding errors and work with staff to address any identified issues. Additionally, healthcare providers can use software solutions that automatically check claims for coding errors before submission. By addressing the issue of coding errors, healthcare organizations can improve the accuracy and efficiency of their claims processing, reduce the impact of denials on their revenue cycle, and ensure that patients receive the care they need.

Preventing Denials in your Medical Billing Practice

Preventing denials in medical billing practice is crucial to ensuring timely payments and avoiding the additional costs and administrative burden associated with resubmitting claims. Here are 8 ways to help prevent denials in medical billing practice.

1.  Quantify and categorize denials

Track, measure, and report trends by doctor, department, procedure, and payer to calculate and classify claim rejections. Reliable business intelligence requires technology and analytics, but they are well worth the effort and money.

2.  Create a task force

This task force should be made up of professionals from different departments within the medical practice, such as coding, billing, and clinical staff.



The task force should work together to identify areas of the billing process that are prone to errors or inconsistencies and develop strategies to address them. For instance, the team can review common reasons for denials, such as missing or incorrect patient information, and create protocols for addressing these issues proactively. The team can also conduct regular audits to ensure compliance with regulatory requirements and identify areas for improvement.

3.  Improve patient data quality

Medical billing claims staff should ensure that patient data is accurate, complete, and up-to-date. This includes verifying patient demographics, such as name, address, date of birth, and insurance information.

Accurate patient data can help ensure that claims are processed correctly and can also prevent delays and denials caused by missing or incorrect information. In addition, it is important to collect and document detailed information about the medical services provided, including the diagnosis, treatment plan, and any relevant medical history. This can help support the medical necessity of the services provided.

4.  Avoid incorrect assumptions and determine the true reasons for denials

Going beyond general denial code explanations and undertaking root cause analysis can help you avoid making erroneous assumptions and find the real causes of rejections.

5.  Develop a denials prevention mindset in all parts of the revenue cycle

In all areas of the revenue cycle, including patient accounting, case management, medical billing records, coding, contracting, compliance, and patient access, adopt a denials prevention attitude.

6. Use automated predictive analytics to flag potential denials

In addition to accurate documentation, coding, claim monitoring, and patient verification, medical billing practices can also use automated predictive analytics to help flag potential denials.

By analyzing historical data and identifying patterns and denial trends, these tools can help predict the likelihood of a claim being denied and flag potential issues before medical claims are submitted. This can help medical billing staff address issues proactively and make necessary corrections to increase the likelihood of successful claims.

Conclusion

In conclusion, if you are struggling to manage denials and optimize your revenue cycle, the Revenue Cycle Management services offered by Prosperis Consulting can provide you with the solutions you need. We can help you streamline your denials management process and improve your claims management efficiency with our healthcare industry expertise. By partnering with us, you can focus on providing quality care to your patients while we take care of the administrative burden of managing denials. Our team of experts is dedicated to helping you achieve financial success, and we are committed to providing you with exceptional service and support every step of the way.

Contact us today to learn more about our revenue cycle management services.