Rejected medical claims cost you time and money. However, medical claims processing doesn’t need to be so difficult.
Getting a medical claim approved on first submission will make life easier for everybody.
Most insurance companies know that if they deny a claim right away, the odds are that they will never have to pay it. These are for-profit businesses, after all.
So how do you make sure all of your I’s are dotted and your T’s crossed so that the insurance company can’t reject your claims?
In this article, we’ll explore why medical claims are typically rejected on first submission and what you can do to avoid this unnecessary headache.
1. Transcript Errors That Need to Be Corrected
Most medical claims are initially rejected because they have easily avoidable errors.
For instance, if a patient’s birth date is December 21, 1975, and it’s submitted as December 21, 1976, the claim will be instantly rejected.
Attention to detail is key in medical claims processing because any minor error can void the claim.
If you’re wondering why a claim has been rejected when everything you’ve submitted seems to be in line, the first thing to do is check for errors or typos.
Something as simple as spelling the name Jane Johnsen instead of Jan Johnson can be a stop-gap that will keep a claim from being approved.
2. The Claim Was Filed with a Provider That is Not in Network
This is one of the most common reasons that medical claims get denied.
Many employer’s health coverage providers are HMO’s (Health Maintenance Organizations) and require a patient to stay within the network to be covered.
When a patient goes outside of the network, they are working with providers that haven’t agreed to the payment terms the insurance company has laid out. These claims will be denied.
In addition to this, non-emergency care or care that is not deemed as necessary from a medical perspective can be denied or paid out at a lower than expected rate.
In these cases, the patient will be expected to cover the entirety of the bill or pay a larger amount than expected.
Make sure your patients stick to providers that are within their HMO’s network and only have procedures done that are deemed necessary by doctors. Otherwise, their medical claims will be denied.
3. Medical Claims Charges Aren’t Covered by the Policy
There’s no doubt that insurance coverage is a complicated subject. If medical claims were rejected, there is a good chance that they were not covered by the insurance policy to begin with.
This can be very frustrating because none of us enjoy pouring through page after page of insurance jargon. However, before a treatment or procedure is performed, patients always need to verify if it is covered by their policy.
This avoids unpleasant and expensive surprises down the road.
Explain it to a patient like this: is it better to know now that a procedure won’t be covered so you can financially plan for it? Or is it better to be slapped with a huge and unexpected bill months after the procedure is complete?
The answer is evident.
Teach patients to spend some time pouring through their policy so they know what is and isn’t covered.
If they have questions about any specifics, call the insurance company and get the answers they need.
4. Was the Medical Claim Filed in a Timely Matter?
Delaying on filing medical claims will get them rejected more times than not.
Insurance companies expect that a claim will be filed in a reasonable time frame from when care was provided. If the claim isn’t filed within the benefit year, it will be denied.
The best policy is to file all medical claims as soon as humanly possible after treatment. This will avoid potential headaches down the road.
5. There Was No Referral or Pre-Authorization
In many cases, insurance companies will not cover medical claims that are done without a referral or pre-authorization from a doctor.
Especially in cases involving MRI’s or CT scans, a doctor needs to request or refer these. If they do not, the medical claim could be denied.
If you’ve received a denial for a procedure and are unclear why, find out if the doctor properly referred it. If it wasn’t, their office should be able to clear up the error.
6. Billing Error: The Medical Claims Went to the Wrong Insurance Company
This may sound ridiculous, but it happens quite often.
With millions upon millions of medical claims being processed every year, it’s easy for a claim to get directed into the wrong insurance company’s hands.
A common reason this happens is when a patient hasn’t seen a particular doctor for a long period of time. Often, the doctor will have out-dated information on file and will use that information for filing medical claims.
This is a sure-fire way for a medical claim to get denied.
Fortunately, you can streamline medical claims billing to avoid these common errors from happening.
7. Duplicate Coverage
Expanding upon point number 6 is a scenario where a patient has duplicate coverage.
Some patients have coverage through their own employer as well as their spouse’s employer.
In this situation, it is common that medical claims get presented to the wrong insurance company and end up denied.
Duplicate coverage can be a great thing to help cover gaps in policy coverage. However, it can cause confusion in medical claims processing.
Make sure all claims are going to the right provider based upon the care provided. Missing this detail will get claims rejected on first submission every time.
Even if a medical claim is rejected on the first submission, it doesn’t mean that it’s time to give up.
Hospitals, doctors and health insurance companies can help reverse the rejection.
Stay on top of all medical claims from beginning to end. It is the insurance company’s job to pay out all claims that are within their contracted agreements.
If the claim is rejected on first submission, review these seven reasons why this may have happened. Then take action immediately.
To file medical claims faster and more effectively, and to focus more on patient care and less on insurance claims processing, join the thousands of providers across America using Apex EDI.