Denials in Medical Billing: How to Play Nice with Insurance Denials

Boost your clean claim ratio with this list of medical billing denials and solutions for emergency physician groups.

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Denials in medical billing do more than create stress and annoyance for your emergency medicine group.

They also slow down your ED’s operations and efficiency and cost serious revenue.

Denial management is the practice of:

  • Figuring out why your medical claims are being denied
  • Determining the best way to lower your denied claims rate
  • Implementing strategies to increase your clean claims and boost revenue

If you haven’t been worried about your ED group’s denial rate, here’s why you should start.

Why Medical Billing Denials and Solutions Matter So Much

Industry standards show medical billing denial rates average 2% for hospitals and between 5-10% for other medical practices[*].

But a report from the Government Accountability Office (GAO) shows a staggering 25% of claims are denied.

There are two types of medical denials:

Hard denials cannot be reworked or corrected. Your group will need to write them off and consider them lost revenue.

Soft denials can be corrected and collected on if providers rework the claim or send additional information to support the provided service.

Many independent EM groups don’t have the time, money, or staff to rework dirty claims, resulting in 50-65% of denials never being paid[*].

Each rework costs an average of $25 per claim. If you have 100 claims that need reworking a month, that’s $2,500/month to make dirty claims legit — or $30,000 each year.

But practices choosing to write off their denials rather than rework them average a loss between 1% and 5% of their net patient revenue.

Depending on the size of your practice, this loss could turn into thousands of dollars. After all, 1% of $1 million in revenue is still $10,000.

No practice should leave that kind of money on the table.

The good news is EM groups that rework their claims have a success rate between 55% and 98%[*]. This will bring much-needed revenue back to your practice.

Though you’ll always have medical billing denials, you can prevent the most common from negatively affecting your EM group’s profitability.

Top 5 List of Denials In Medical Billing You Can Avoid

These are the most common healthcare denials your staff should watch out for:

#1. Missing Information

You’ll trigger a denial if just one required field is accidentally left blank. This includes everything from social security numbers to plan codes, modifiers, addresses, and more.

It’s estimated over 60% of medical billing denials and 42% of denial write-offs happen simply due to blank fields[*].

#2. Service Not Covered By Payer

This occurs when your staff doesn’t check with your patient’s insurer to make sure the procedures and services being rendered are covered under their current benefit plan.

#3. Duplicate Claim or Service

Claims will get flagged and denied if they’re considered duplicate. This means the submitted claims have the same:

  • Beneficiary
  • Services performed
  • Date the services were rendered
  • Healthcare provider

#4. Service Already Adjudicated

This happens when benefits for one service get lumped into the payment/allowance for another service or procedure which has already been settled.

#5. Limit For Filing Has Expired

Insurance companies have a strict time frame in which your staff can file claims. Your ED group will also have a specific deadline to submit reworked claims. If claims aren’t in before the deadline, they’ll be denied.

Knowing these common reasons for healthcare denials will help you implement a plan to prevent them.

Denial Management in Medical Billing: Best Practices

Make denial management a priority at your independent ED and:

Learn which types of denials you’re receiving most

Find out where your ED’s struggling by monitoring your practice’s data.

Intuitive systems can now track, measure, and categorize information about denial trends by:

  • Physician
  • Department
  • Procedures and services
  • Payers and insurance companies

If you notice more denials for non-covered services, the issue may stem from incorrect codes. But you’ll have a different problem on your hands with denials caused by inaccurate patient information captured in the waiting room.

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These valuable stats will show your team what they need to focus on specifically for measurable success.

Constantly monitor your clean claims ratio and provide feedback

Clean claims are paid the first time and are never rejected. The dirty claim definition is anything that’s rejected, filed more than once, contains errors, has a preventable denial, etc.

Once you start tracking denials, you’ll be able to provide feedback to your staff about what they’re doing right and what they need to improve.

Choose the right claims management software

Coding errors make up a majority of complex claim denials.

In one American Hospital Association (AHA) survey of nearly 750 hospitals, 81% of complex denials in the fourth quarter were due to inpatient coding errors[*].

And each complex claim denial averaged $5,427.

Choose claims management software that not only gives you real-time clean claims stats but also intelligent features to spot mistakes before claims are submitted and denied.

Alerts for upcoming deadlines will also prevent claims from slipping through the cracks and expiring.

But if all this seems like a lot for your independent ED staff to take on, you don’t have to do it alone.

Let DuvaSawko Decrease Your Healthcare Denials and Maximize Your ED Group’s Profitability

Your ED group’s denial rate shows how much more profitable you should be. And it’s also a reflection of your Revenue Cycle Management process.

Maintaining a low denial rate takes a lot of work, especially with all the constantly changing regulations, rules, and medical billing codes to keep up with.

Outsourcing this task to experts who specialize in medical billing may be the best decision you’ll ever make for your team.

Partner with an emergency medicine Revenue Cycle Management specialist such as DuvaSawko and you’ll have fewer insurance denials and greater cash flow.

DuvaSawko even boasts a 99% success rate in overturning denials.To minimize errors while maximizing reimbursements, read more about the benefits of outsourcing your ED billing & coding..

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