It can be very frustrating being a mental health medical biller when insurance claims get denied. Similarly, claim denials in medical billing are not a reason to panic; they can be due to inappropriate information in the claims. Although it may feel overwhelming, it is the responsibility of each biller to fix all the issues and try to avoid denials. You can follow a few things to reduce the denials. In this guide, you’ll discover the reasons for denial in medical billing, tips to overcome them, and some common denials. Are you ready? Let’s find out more about it!
What Is Denial in Medical Billing?
Claim denials in medical billing are when healthcare insurance companies refuse to pay for the services provides to a patient by a healthcare provider. These refusals can occur for a variety of reasons, including a lack of sufficient documentation, incorrect coding, or even a failure to get pre-authorization.
Additionally, denials complicate matters and might interrupt revenue collections while increasing operational costs. By contrast, healthcare practitioners must devise a strategy for dealing with these denials in a timely and effective manner. For minimal denials and maximum revenue cycle, contact us at MAVA Care.
Types of Denials in Medical Billing
1. Eligibility Denial
Payer denials can occur on several reasons. For instance, the payer might reject a claim because the patient is ineligible to receive the claim. It usually occurs when the patient’s insurance is not active when visiting a doctor. In most cases, patients may not pay their insurance premiums, which causes coverage lapses.
Furthermore, the care they accept may not be enclosed by their insurance cover. Medical billing departments need to check if the patient is eligible or has coverage before scheduling appointments. It helps avoid problems with filing claims.
2. Authorization Denial
There are many types of claim denials in medical billing from different payers, including an authorization denial illness. It is when a healthcare provider renders a service without requesting permission first. It is alos known as pre-authorization and denial authorization.
Likewise, healthcare providers may have a denial of authorization when they did not request pre-authorization to schedule surgery, and the pre-authorization expire before the service date. Understanding what each insurance plan covers for pre-authorization also helps to prevent these types of problems, as well as save waste time.
How Do You Handle Rejection in Medical Billing?
To prevent the claim from being rejected, there are a few procedures to consider.
- Understanding rejected claims.
- Regularly checking the manage claims screen.
- Identifying rejected claims.
- Analyzing the rejection reason.
- Correcting rejected claims.
- Follow-up and documentation.
Claim Rejection Vs. Claim Denial
Claim Rejection | Claim Denial |
| The insurance company rejects the calims because it has not met certain criteria. | The insurance company refuses to pay for the claim after evaluating the information. |
| Typically, due to errors in submission, missing information, or incorrect coding. | Usually due to the policy terms, patient eligibility, medical necessity, or services not covered. |
| You can easily correct and resubmit the claims. | Usually requires a formal appeal process to resolve. |
| Incorrect patient details, missing or invalid codes, duplicate claims. | Service not covered, lack of pre-authorization, non-medically necessary. |
| The claim is reimbursed to the provider for alteration. | The claim is formally declined, and the provider may appeal. |
Common Denials in Medical Billing
There are various denials with various specialties. To fix the errors and issues, you need to pay more attention. Here are some of the top denials in medical billing include:
Clearing House Denials in Medical Billing
When a clearinghouse reviews a claim and then sends it back to the biller for any necessary revisions, this is known as a clearinghouse rejection. Nevertheless, this process can be hectic for providers because it may delay reimbursement.
Eligibility Denials in Medical Billing
Several reasons for medical billing denials encompass missing information, issues related to coordination of benefits, procedural complications, exclusions of benefits, and difficulties in qualifying and timely filing. Denials in healthcare can disrupt your facility’s cash flow. However, they also necessitate appeal processes to overturn the payer’s decision.
AR Denials in Medical Billing
Accounts receivable (AR) denials in billing occur when an insurance company rejects a claim submitted by a healthcare provider. Denials can substantially influence AR, resulting in lost income for healthcare providers. However, providers must understand the reasons behind these denials because addressing them effectively is crucial.
Hard Denials in Medical Billing
Because the service is not covered, a hard denial—when insurance rejects a claim—can be difficult. Appeals may result in lost income, but they cannot reverse or correct a firm denial. A soft denial, on the other hand, occurs when an insurance provider examines a claim and denies payment for a reason like incomplete information or inadequate supporting documents.
Authorization Denial in Medical Billing
Denial in medical billing occurs when an insurance company decides not to pay for treatments or items. The services or products do not comply with the insurance company’s policy or requirements. The provider overcharges the insurance company.
What Are the Reasons for Denied Claims?
1. Incorrect Patient Information
The primary denial reason codes in medical billing consist of patient information. It may range from name and date of birth to insurance information and many other details that do not correspond to the insurance company’s given data. Rejections and late payments significantly impact cash flows.
2. Insurance Coverage Issues
Frequently denial codes when the services fall outside the patient’s insurance plan or if the patient is deemed ineligible for coverage at the time the service is rendered. It can occur when the insurance plan excludes certain treatments or if the patient’s coverage has expired. Moreover, a lack of understanding or overlooking the nuances of policy details can further exacerbate this problem.
3. Duplicate Medical Claims
Denials may result from submitting multiple claims for the same service. It occurs as a result of billing department miscommunication or clerical errors. Repetitive submissions may also result from the initial claim being misunderstood as lost or unacknowledged.
4. Authorization and Referral Issues
Non-covered services may not have prior authorization or appropriate referrals. Most insurance companies require advance authorization for certain procedures and non-payment results if the authorization is not obtained. Knowledge of payer requirements and necessary approvals are imperative.
5. Coding Errors
Incorrect or incomplete coding can result in denials; this includes using outdate codes, missing codes, or coding errors that do not match the services provided. Reimbursement and appropriate claim adjudication depend on accurate coding. It guarantees seamless claim processing. However, many providers overlook these details, although they are crucial for financial stability.
6. Medical Claim Necessity
Claims may be reject if the insurance company determines that the services given were not medically requires under their criteria. It frequently includes a comparison of the given documentation to the insurer’s medical necessity requirements. Clear and detail documentation is essential for establishing the importance of services performed.
7. Inaccurate Medical Billing
Billing problems, such as improper charge amounts, incorrect billing for services, or invoicing for services not provided, can result in denials. These errors not only reduce income but also harm the provider’s reputation among payers.
Tips To Reduce the Denials in Claims
1. Eligibility Verification
We recommend that providers first design a patient verification procedure. The two most prevalent causes for denial are eligibility and authorization. This circumstance can be avoided by verifying the patient’s insurance coverage and eligibility before the visit. This preparatory procedure saves time and avoids problems with future claim filings to insurance companies.
2. Regular Audits
Perpetual audits can also help to identify common billing cycle issues. Healthcare practitioners use this information to resolve the problem in the same way that they analyze denials by timeliness trends. Periodic audits allow billing teams to identify and correct errors before submitting claims, boosting accuracy and reducing claim rejection.
3. Communicate with payers
Stay up to date on payer-specific standards and procedures to avoid claim submission problems. For challenging claim denials, it is necessary to understand both the payer contracts and the patient’s coverage-benefit plan architecture. Schedule regular meetings with payer reps to discuss issues and remain up to date on developments.
4. Double Check Referrals and Authorizations
Authorization issues account for up to 18.2% of claim denials in medical billing, so train your personnel to double-check referrals and authorizations. It is also beneficial to review your denial claims owing to permission issues and evaluate the data to determine the core reason. Was the authorization date passed? Was authorization ever acquired, or was it for the incorrect procedure? Knowing the core reason can help you solve the underlying issue.
End Note
Each provider must keep the practice workflow smooth by minimizing the claim denials in medical billing and maximizing the RCM. Moreover, it is crucial to divide the denials into payers and provider types. Flawless coding and billing, eligibility verification, and documentation are the main pillars of the practice’s revenue.
Thus, partnering with an experienced medical billing company is the best option when it comes to claims management. Their professional team stays up to date on payer rules to ensure accurate claim submission. You may rely on MAVA Care, a medical billing company, for minimal denials and maximum revenue cycle.
