How Can Medical Billing and Insurance Work Together to Avoid Claim Denials?

Getting paid for the services you provide should be easy: you deliver the service, submit a claim, and receive your payment. It sounds simple, but things can get complicated. Errors can happen, whether it’s from mistakes in coding or data entry on your end or complex adjustments made by the payers.

Experian Health’s State of Claims 2022 report shows a troubling rise in denied healthcare claims. In a survey of 200 health professionals, 75% said claims are denied between 5% and 15% of the time, and almost a third see denials in the 10% to 15% range. This leads to billions of dollars in lost or delayed payments and extra costs for fixing and resubmitting claims. It’s clear why reducing claim denials is a top concern for those managing revenue cycles.

In this article, we are going to discuss the potential reasons for claim denials. We will explore the solutions to handle these denials, specifically how billers and insurance companies can collaborate to prevent them.

So, let’s dive in!

Why is It Necessary for Billers and Payers to Collaborate?

There are two obvious ways to handle claim denials: by your in-house billing team or by your outsourced billing team. If you are outsourcing your medical billing services, then the billing team and insurance teams must collaborate closely.

• They should share information, understand each other’s roles, and stay current on insurance rules.
• This means verifying patient information, using accurate medical codes, and submitting clear, complete claims.
• When denials occur, a dedicated team should appeal the incorrect decisions.

Through close collaboration and learning from mistakes, healthcare providers can enhance their financial health and ensure timely payment for patient care.

Six Strategies for Managing Insurance Claim Denials

Even with precautions, practitioners can face insurance claim denials. Handling these denials can be frustrating and complex for them and their staff. The best way to overcome this challenge is by outsourcing billing services to a medical billing company.

Here are key strategies that billing companies need to follow to manage claim denials:

1. Review All Claim Notifications

Examine every remittance advice (RA), explanation of benefits, or notification from the insurer. Check if the claim was paid fully, partially, delayed, or denied. Follow the insurer’s instructions for resubmission if the claim is marked as “unclean” or contested. If partially paid or denied, the notification should explain why and detail the steps for resubmission or appeal.

2. Contact the Insurer for Clarification

If the notification is unclear, call the insurer. You might discover errors in how the claim was processed. You could also find that adjusting your submission procedures might resolve future issues.

3. Act Quick

Submit and resubmit your claims as soon as possible, sticking to the deadlines set by the insurance company or your state’s regulations. If you miss these deadlines, the claim might be processed based only on the initial information, or your appeal could be rejected as too late.

4. Understand the Appeals Process

Familiarize yourself with the insurance company’s appeals procedures before you submit an appeal. Knowing their procedures will help you respond more effectively. Keep up-to-date with each insurer’s rules and procedures, which are often listed on their websites or provided in hard copies when you sign a new contract.

5. Keep Detailed Records of Disputed Claims

Whenever you contact an insurance company to discuss a claim, make sure to document the details of the conversation. This includes recording the full name of the representative you spoke with. File this information along with other critical details related to the claim. These details should include reasons for partial payments, delays, or denials. Also, document the steps taken by your office to follow up and the final outcome.

These records are crucial for future actions. They can help with escalating appeals, filing complaints with the state insurance commissioner, or pursuing legal action. Additionally, they serve as valuable references for drafting appeal letters and managing future claims more effectively.

6. Seek Available Assistance

Dealing with claim denials can be challenging. However, addressing these issues proactively can ultimately save you time and resources. You need to understand the requirements and expectations of your insurance carriers, which can help minimize the frequency of denials. If you consistently face issues with a particular insurer, don’t hesitate to reach out to your state insurance commissioner’s office for support.

Steps You Should Take If You Are Managing Billing In-House

If you are not outsourcing your Physician Medical Credentialing Services to a billing company, then start by identifying the root cause of the denials. Run denial reports for a week or a month. These reports should include denial reasons, procedure codes, modifiers, diagnosis codes, and payers. Sort the data to determine whether a specific payer, service, or coding issue is causing the most denials.

Next, educate your staff. You might begin by having them read relevant articles. Implement practice management alerts and other corrective measures. To streamline claim corrections, use a standardized claim correction form. (Download FPM’s claim correction form.)

Regularly monitor progress and provide feedback to those handling denials. Set incremental goals for significant denial issues, and celebrate improvements.

Preventing just 15 denials per month can lead to faster reimbursements and save $4,500 annually on correction costs. These savings and improved cash flow can significantly enhance your practice’s financial health.

What to Do If Medicare Denies a Claim

• Review the carrier’s Explanation of Benefits (EOB), which should include the rationale behind a claim denial. You might only need to revise or supplement the claim if the denial has some missing information. When you review the EOB and the reason for denial is not clear, get in touch with the carrier to find out more.
• Prepare a standard letter that you can use to request that the insurance company review your claim. It can be customized to include any written explanation that is required concerning a specific claim.
• Consider utilizing your right to appeal an adverse claims decision. To file an appeal, submit a written request to the carrier within 120 days of the initial claim denial.

The Bottom Line

This is where we conclude the discussion. Let us go over all of the important points again to make sure they stick in your mind:

• Review all the documents regarding claims carefully. These include EOB, RA, or other notifications from the payers.
• Outsource your Physician Medical Credentialing Servicesto a medical billing company to get maximum reimbursements for the services rendered.
• Do not get disheartened if the claim gets denied; appeal it according to the payer’s guidelines.
• Collaborate closely with the insurance payer’s team. Share information and stay updated on the latest rules.
• Keep detailed records on disputed claims.

You can optimize your billing cycle and maximize your reimbursement rates by following the above-mentioned guidelines.