How Proper Medical Billing Reduces Claim Denials

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Your Health Magazine

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How Proper Medical Billing Reduces Claim Denials

Alt text: A healthcare professional in a white coat writing on a clipboard in a medical setting.

Claim denials are a common issue in medical practices, regardless of size or specialty. Whether you manage a physical therapy clinic, a mental health practice, or a home healthcare agency, it’s essential to understand the root causes of denials and how to reduce them. Proper billing practices are key to minimizing these issues, improving cash flow, and ensuring timely payments.

Common Billing Mistakes That Lead to Denials

Certain billing mistakes are more likely to cause claims to be denied. Here are some of the most common ones:

• Incomplete or Incorrect Patient Information
  Claims can be denied when there are errors in patient information, such as misspelled names, incorrect dates of birth, or missing insurance policy numbers.
• CPT Coding Errors
  Using the wrong Current Procedural Terminology (CPT) codes can result in claim denials. Accurate coding is essential to ensure the procedures performed are properly represented.
• Insufficient Documentation
  Without detailed documentation to support a claim, insurance companies may reject it. It’s important to keep comprehensive records of the services provided.
• Failure to Submit Claims on Time
  Claims submitted after the deadline are automatically denied. Timely submission is crucial to ensure claims are processed and paid.

For specialized fields like mental health, home healthcare, and physical therapy, billing errors can be more common. For instance, home healthcare often requires multiple codes for a single visit, making it more prone to mistakes if not handled carefully.

Best Practices to Reduce Claim Denials in Healthcare

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To reduce the likelihood of claim denials, it’s important to implement clear and consistent billing practices. Here are some tips to follow:

• Verify Patient Information
  Always double-check patient details before submitting claims. This includes confirming names, insurance policy numbers, and service dates.
• Use Correct CPT Codes
  Ensure that you are using the correct and up-to-date CPT codes for the services provided. Training staff or working with specialized coding experts can help reduce errors.
• Provide Complete Documentation
  All services should be thoroughly documented with clear notes and treatment plans to support the claims. Insufficient details can lead to denials.
• Submit Claims Promptly
  Submitting claims soon after services are provided reduces the chance of missing deadlines. Aim to submit claims within one business day whenever possible.
• Follow Up on Denied Claims
  Proactively follow up on any denied claims. Track the reasons for the denials and address them quickly to avoid recurring issues.

By following these best practices, healthcare providers can greatly reduce their chances of claim denials, making the reimbursement process smoother.

Key Practices to Prevent Claim Denials

To prevent denials, it’s important to implement the following practices:

• Eligibility and Benefits Verification: Ensure eligibility is verified for the specific date of service, rather than just checking if the insurance is “active.”
• Authorization Tracking: Confirm that all necessary authorizations are in place and properly documented before submitting claims.
• Consistency with Rendering and Billing NPI: Make sure the rendering and billing NPIs (National Provider Identifiers) are aligned to avoid mismatches.
• Accurate Modifier Use: Be cautious when using modifier codes and following bundling rules, as errors in these areas can lead to claim denials.

A multi‑specialty practice found that skipping eligibility re‑verification led to significant revenue losses when changes in patient coverage weren’t detected. Re‑verifying insurance eligibility at each visit reduced preventable denials and improved claim acceptance. (Source: Eligibility Verification 101). 

The Role of Outsourced Medical Billing Services

Alt text:  A healthcare professional in a white coat discussing with a patient while showing information on a tablet.

For smaller practices, keeping up with evolving billing codes, payor requirements, and deadlines can be challenging. Outsourcing medical billing to specialized services, such as TMS Billings, can help practices ensure claims are submitted accurately and timely, reducing the risk of denials.

• Avoid Billing Errors: With professionals handling your billing, errors are reduced, and claims are more likely to be submitted correctly.
• Benefit from Expertise: Billing services that specialize in your practice area will help ensure compliance with industry standards.
• Allow Focus on Patient Care: By outsourcing your billing, you can focus more on patient care, knowing that the billing process is being handled accurately.

Outsourcing can also help with denial management, ensuring that rejected claims are quickly addressed and reducing the overall denial rate for your practice.

The Importance of Denials Management

Effective denials management is a crucial aspect of reducing claim denials. Key actions in this process include:

• Identifying Patterns: Analyzing the reasons for denials can help identify recurring issues. Addressing these issues at their root can prevent future denials.
• Quick Resolution: Addressing denied claims quickly can minimize the financial impact and ensure that your practice receives the reimbursement it is entitled to.

A family medicine practice in Ohio faced denials due to insurance verification issues. The practice began using an eligibility verification tool before each visit to ensure the patient’s insurance was active. As a result, they reduced claim denials by 75%, saving time and improving revenue cycle management.

Reducing Claim Denials in Medical Billing

Alt text: A medical billing statement with a stethoscope and calculator.

Reducing claim denials is essential for practices in all specialties, including mental health, home healthcare, and physical therapy. Key strategies to reduce denials include:

• Ensure Accuracy: Ensure that all claims are accurate and complete before submission to reduce the likelihood of denials.
• Timely Submission: Submitting claims as soon as possible after the service helps to avoid missed deadlines.
• Immediate Follow-Up: Follow up on denied claims promptly to resolve issues quickly and maintain a healthy cash flow.
• Experienced Billers: Having skilled billers who understand the specific requirements of your practice ensures accuracy and compliance in all submissions.

Final Word 

Reducing claim denials requires a systematic approach to medical billing. By following best practices and addressing common mistakes, healthcare providers can improve their chances of receiving timely payment. Whether you handle billing in-house or partner with a specialized billing company, it is important to address claim denials quickly to maintain a steady revenue cycle.

FAQs

Here are some common questions about reducing claim denials in medical billing:

What are the most common causes of claim denials?
Claim denials often occur due to missing or incorrect patient information, coding errors, insufficient documentation, or late submissions.

How can I reduce claim denials in my practice?
To reduce denials, ensure accurate patient information, use correct CPT codes, provide complete documentation, and submit claims promptly.

Why is it important to follow up on denied claims?
Following up on denied claims ensures that any issues are resolved quickly, which helps reduce the financial impact on your practice.

How can outsourced billing services help reduce denials?
Outsourced billing services ensure that claims are accurate, submitted on time, and followed up on promptly, helping to reduce the overall denial rate.

How does effective denial management improve cash flow?
Effective denial management helps resolve claim issues quickly, reducing the amount of time it takes to get paid and improving cash flow.

What role does timely claims submission play in reducing denials?
Submitting claims as soon as possible after providing services minimizes the risk of missed deadlines and ensures that claims are processed without delay, reducing the chances of denials.

https://www.experian.com/blogs/healthcare/insurance-eligibility-checks-how-automation-reduces-denials-and-delays