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Why Was My Claim Returned?

When medical billers complete claims correctly, the payer reimburses the medical provider for services. However, any time human beings enter data, there’s a potential for error. The more information they must enter, the greater the chance something might be missed along the way. Medical claims processing involves both information vital to the patient receiving needed medical care and data necessary to the healthcare provider getting paid. While a returned claim can still be resubmitted, it’s much simpler to get it right the first time. Here we’ll review the most common reasons claims are returned and suggest ways to keep it from happening.

Denied Isn’t Rejected

When a claim comes back as rejected, that doesn’t mean the payer is refusing to process it altogether. A denied claim is one the insurance company has decided should not be paid at all. The Explanation of Benefits (EOB) will contain the reasons. These errors frequently result in denials:

  • Duplicate billing – Billers submit a payment request for the same service, usually because of human error.
  • Upcoding – When the provider uses a higher paying code to request payment for a service that’s not covered.
  • No referral or authorization – If the payer requires it and the patient doesn’t obtain it, the claim may be denied.
  • Services aren’t included, or coverage has expired – Providers should check coverage every time a patient comes in for service.

Providers can still appeal denied claims, but they are less likely to receive payment than claims that are only rejected.

Rejected claims contain errors in need of correction. The medical biller might have left fields empty or inputted data incorrectly. They still have the opportunity to correct the errors and resubmit the bill for payment.

Medical billing clearinghouses scrub claims when they receive them from healthcare facilities before submitting them to insurance companies. They thoroughly check them for discrepancies to avoid the delay involved in correcting and resubmitting claims.

Return Unprocessable

When healthcare facilities submit claims to the Centers for Medicare & Medicaid Services (CMS), sometimes they receive claims back after editing marked, “return as unprocessable.” That means CMS has neither rejected or denied them, just sent them back. The claim might contain data that is incomplete or incorrect. They can’t be appealed or resubmitted, the healthcare facility has to start over. Submit them electronically as a brand-new claim after carefully correcting errors.

Errors Caused by Medical Billing Specialists

When medical billing specialists process a high number of claims in a day, the potential for mistake increases. Every aspect of the claim must be correct for the insurance company to pay it. Here are the most common errors that lead to a return.

Errors related to the patient’s identification – If the patient’s name isn’t consistent with what the insurance company has on file, if billers select the wrong gender, or if the insurance identification number is off by a single digit, insurance might return the claim.

  • Healthcare provider information is missing or incorrect – The medical facility’s address and the physician’s name and contact information must match the insurance company’s records.
  • Insurance policy data needs to be corrected – One or more of the fields related to their coverage needs review.
  • Coding inaccuracies – CPT, ICD-9- CM, place of service or HCPCS codes might contain the wrong number of digits or have inconsistent modifiers.
  • Entering the wrong code in the wrong place – Billers sometimes input the diagnostic code where the treatment code should be or mismatch the two.
  • Neglecting to enter codes for services performed – If there’s missing information about treatment or diagnosis, insurance companies don’t know how much to pay.

Other Common Errors That Trigger Returns

Sometimes claims are returned for factors outside the medical biller’s control. Insurance companies don’t always remember to attach an EOB when they deny a claim, or they may mistakenly send it to the wrong provider. If there’s no EOB, there’s no way to determine what led to the return.

Sometimes patients don’t realize their insurance coverage has expired or been terminated. A medical billing specialist should always authenticate coverage before submitting a claim to avoid rejections for insufficient coverage.

The following returns are caused not by the medical biller, but by the healthcare provider.

  • Insufficient documentation – Doctors are notorious for messy handwriting, but it becomes more than just an inconvenience when it’s illegible for billing specialists trying to code treatment and diagnosis.
  • Undercoding – Physicians sometimes try and save a patient money by indicating they had a less expensive procedure than what they actually performed. Undercoding is fraud.
  • Upcoding – This is the opposite of undercoding but just as illegal. The provider claims they performed a more expensive service for the patient or that they provided treatment that never occurred.

Medicare Remittance

With Medicare, the appeals process is known as “redetermination,” and the form necessary for appeal is the Medicare Redetermination Notice (MRN). Providers must file appeals within 120 days of receiving the Medicare Summary Notice indicating the claim was reduced, denied or deemed unprocessable.

CMS recommends that providers store a copy of each card for patients with Medicare, along with any supplemental insurance cards. Report patient identification exactly as it appears on the card, including suffixes like Jr., Sr. and II. Suffixes should be included in the correct field, not added to the patient’s last name.

When reporting the Health Insurance Claim Number (HICN), leave out hyphens and blanks. Since Medicare payment is often secondary to other coverage, include additional group healthcare coverage information, workers’ compensation data and Veteran’s benefits.

Avoiding Returns

Knowing the most common errors helps healthcare providers and medical billers to be on the alert. Another way to prevent errors is to stay current on billing and coding changes. Protocols constantly update, so what’s correct today might cause a returned claim in the near future. Consistently double check digit order and name spelling and stay in touch with providers when you suspect there might be an error.

Claims processing software streamlines processes by checking for errors for you. Find out how ApexEDI can free you from worrying about claims so you can focus on healing patients.

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Apex EDI, Inc.
556 E Technology Ave
Orem, Utah 84097
Support: (800) 840-9152
Sales: (801) 383-0388
Fax #: (801) 642-0333
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