Denial rework costs providers roughly $118 per claim. An estimated $262 billion, or 9% of the estimated $3 trillion in claims submitted by hospitals last year were initially denied, according to a new analysis by Change Healthcare. Below is a list of 5 common reasons for denied claims.
Timely Filing – A timely filling denial occurs when a claim is filed past the carrier’s deadline. This can be extremely frustrating, as all insurance carriers have their own definitions of what is considered “timely”. Some are as short as 30 days, and others can be as long as two years. Therefore, it is imperative to prioritize your filling according to each carrier’s guidelines.
Medical Necessity – Medical necessity denials occur because an insurance carrier deems that the condition a patient was in did not meet certain level of severity to be medically important enough to warrant that treatment. Basically, the patient could have been treated at a lower level of care. These types of denials can be especially difficult to overturn as they require a clinical background to understand and work the denial.
Behavioral Health – Behavioral Health denials oftentimes take a slightly different approach to overturn than most others. This is because you are dealing with patients, or family members of patients, who are usually going through some sort of crisis, like substance abuse. Therefore, a softer approach is often required when talking with the patient or family. These types of denials typically require the patient to do something, such as provide documentation of some sort.
Incarcerations – These types of denials can be difficult to overturn, because it requires the patient to be the one to take action, and oftentimes they may not even be aware they have to do so. While incarcerated, convicts receive no benefits from the state – ie no Medicare/Medicaid, no disability. Once they are released, the state requires that the former convict visit the office of social security and update their Common Working File. If someone has not updated their common working file and gets a medical bill, their insurance will deny the claim because they are still listed as incarcerated. Therefore, the former convict must be educated to understand how to and the benefits of updating their Common Working File to their current life situation.
Coding Errors – Coding error denials are perhaps the most easy to correct. Often, incorrect or incomplete information was submitted, and can be quickly corrected and resubmitted. A coder may have used the wrong code or modifier, and simply needs to make that easy correction. To prevent these types of denials, ensure that your staff is properly trained and motivated, and is given adequate time to do their work.
Has your A/R been affected by any of these common reasons for denial? If so, it might be time to find a partner who can help turn your unpaid claims into steady streams of income. Schedule a meeting today with one of our A/R specialists to learn more about how MCI can help you get paid more for the services you’ve rendered.