The primary responsibility of a medical biller is to properly file claims to ensure that the medical provider is reimbursed for services rendered. Unfortunately, it is not uncommon for billers to make human or electronic errors while entering claim data. As many as 80% of medical bills contain one or more errors that increase the risk of denied claims, and each denied claim means lost revenue.
Billers have to deal with two essential elements of medical care – health and money. For this reason, they must check to ensure they make as few mistakes as possible while filing claims. However, as with everything data-related, the more information they have to process, the greater the chances of making mistakes.
The process of filing medical claims is the critical link between ensuring that a patient receives the medical care they need and the medical care provider getting paid for it. Billers often do their best to get everything right the first time because it costs effort, time, and money to resubmit a claim.
This post will review the most common reasons claims are returned and what billers must do to ensure a claim is accepted the first time.
Denied vs. Rejected Claims
There is a difference between a payer denying and rejecting a claim. When a claim is rejected, it does not mean insurance will not process or settle the claim altogether. It means that the documentation may contain one or more errors that prevent it from being processed. When it is denied, it means that the payer has processed the claim and decided not to pay it altogether.
Common Reasons for Claim Denials
The insurance company will often include an Explanation of Benefits (EOB) or the reasons why the claim was denied.
Here are the most common reasons that a claim can be denied.
- Duplicate Billing – When the biller submits a payment request for the same service more than once. This often occurs due to human error.
- Upcoding – When the provider misrepresents the service provided by entering a code for a more extensive or severe procedure than the patient received.
- Undercoding – The insurance company will reject a claim when the provider codes for a less severe or extensive procedure than the patient received. Undercoding is fraud.
- No Referral or Authorization – The payer will deny a claim when the healthcare provider files a claim for a service that the patient does not receive.
- Expired Cover – The payer may deny a claim when the provider files a claim for services provided at the time when the patient’s cover has lapsed.
- Services not Included – Insurance may deny a claim for services which the patient’s insurance does not cover.
Providers can appeal when a claim is denied, but it is much harder to receive payment for denied claims than rejected claims. Clearinghouses use a ‘scrubbing’ process to eliminate the chances of a claim getting rejected. Scrubbing means that they thoroughly scrutinize claims from healthcare facilities for discrepancies before they submit them to the insurance company.
Errors Made by The Billing Specialist
Medical billing specialists often have to process many medical claims every day. Unfortunately, errors of omission and inclusion are not uncommon, but the biller must fix them before the insurance company can pay them. Here are some of the most common mistakes billing specialists make that result in denied claims.
- Patient identification errors – The patient’s name on the claim must match the patient’s name that the insurance company has on file. Other identifying details, including gender, date of birth, and insurance identification number, must match the identifying information on the insurance file.
- Missing or incorrect provider information – The billing specialist must clearly indicate the medical facility’s name and address in the claim. In addition, the name and contact information of the physician must match the information the insurer has on file.
- Incorrect insurance police data – All the fields on the patient’s insurance policy information, including policy number and address, must be correct.
- Inaccurate codes – Incorrect or confusing CPT, ICD-9-CM, or HPCS codes can be the reason a claim is denied. The billing specialist must also ensure that Place of Service codes and HCPCS modifying codes are accurate and contain the correct number of digits.
- Medical code mismatch – This often occurs when the billing specialist confuses CPT with ICD codes. In some cases, the biller may enter diagnostic codes in places of treatment codes and vice versa.
- Missing codes – The biller may neglect to enter all the codes for services provided by the healthcare provider. The insurance company needs the correct diagnosis and treatment codes to determine how much they need to pay.
When a Claim is Returned as “Unprocessable”
In some cases, the Center for Medicare & Medicaid Services (CMS) may return a medical claim marked “Return as Unprocessable.” This means that the claim was neither denied nor rejected – just returned. The claim may be marked as incomplete or incorrect, but it can neither be appealed nor resubmitted. In such a case, the healthcare facility must file the claim afresh and submit it as a new claim after verifying the data and correcting errors.
Other Common Errors that Lead to Claim Returns
Like everyone else, insurance companies also make mistakes when processing claims. As a result, it is not uncommon for a claim to be denied without an EOB specifying the reason.
- The insurance company may forget to attach an EOB or mistakenly send the claim to the wrong provider. Without an attached EOB, the billing specialist will have a hard time figuring out the cause of the claim return.
- Poor documentation, including missing or incomplete documents and illegible writing, are common reasons that lead to denial of claims.
- Patients may not realize that their coverage has expired or terminated in many cases. The billing specialist will often authenticate a claim’s coverage status to avoid claim rejections.
Appeals and Redetermination
When a medical provider’s claim is denied, reduced, or returned as “Unprocessable,” they have the option to appeal in a process known as redetermination. To appeal a claim, a provider will complete the Medicare Redetermination Notice (MRN) form within 120 days of receiving the Medicare Summary Notice.
Here are some steps the CMS advises medical providers to verify when filing a redetermination:
- The patient’s identification must be reported exactly as it appears on the patient’s hospital and insurance cards. Suffixes such as Sr., Jr., and II must be filled in their correct fields and not appended to the patient’s last name.
- Providers should leave out blanks and dashes in the Health Insurance Claim Number (HICN) report.
- Medicare payments are often secondary to other health covers. CMS advises providers to include any additional group health coverage information, worker compensation data, and veteran benefits in the MRN form.
Avoiding Claims Returns
In the healthcare industry, time is money, as every returned claim is an extra cost and effort for the service provider and the billing specialist.
Being aware of the most common reasons for claims returns will help a healthcare provider minimize cases of claims returns. It also makes work easier for the billing specialist.
A notable way to avoid claim returns is to stay updated with the latest billing and coding protocols. It is critical that the health provider fills the correct codes and follows updated protocols when filing a claim.
Claim processing software streamlines the process of checking a claim for errors. As medical billing specialists, we have the most efficient tools that facilitate medical bill claims. Contact ApexEDI to find out more about our claims scrubbing processes and how we can save you time and money so you can focus on healing patients.