Reduce Claim Denials by Avoiding These 5 Common Billing Errors

To optimize revenue cycle management, medical practices must make a conscious effort to reduce the amount of claim denials received. Denials are often caused by minor billing errors.

According to the Academy of Family Physicians (AAFP), the ideal medical denial benchmark should be around 25. In reality, however, most practices are in the 5%-10% range. Over time, this level of claim denials could have a major impact on a practice’s revenue, resulting in costly penalties, lost revenue and delayed payments.

While it’s nearly impossible to avoid all medical billing errors, reducing the rate of denials is challenging because billing is inherently complex. With different processes for coding depending on the procedure, insurer and patient, even the most scrupulous medical financial departments deal with claim denials.

However, by recognizing some common billing errors, your practice can proactively reduce claim denials by preventing mistakes before they occur.

1. Incorrect patient information

Inaccuracies in patient information often lead to claim denials. Simple details—the patient’s name, the insurance payer, policy number and the date of birth—must match and be recorded correctly across all systems. Make sure the primary insurance is listed if the patient has multiple insurance providers.

Finally, determine whether the claim requires a group number and confirm the diagnosis code matches the performed procedure’s code. While denials for incorrect patient data can be refiled, it could take 30-45 days to be paid (rather than the usual 14).

2. Missing information

If you file a claim with any blank fields, that missing information could be cause for denial. Commonly overlooked items include date of medical emergency, date of onset and date of accident. Patients do not always specify these details, so confirm that all of these fields and supporting documentation are completed.

3. Unable to Verify Insurance

A patient’s insurance information can change at any time, so it is important to verify their eligibility each time a claim is filed. Failing to verify insurance will typically result in one of the following denials:

  • Services were not authorized
  • Services were not covered by patient’s plan benefits
  • Patient’s maximum benefits were already met
  • Patient’s coverage was terminated or not available during date(s) of service

4. Limit for Filing Has Expired

If a claim is submitted outside of a specified time window, it could result in a denial. A key to avoiding these issues is submitting documentation within the Affordable Care Act’s claims-submittal period (12 months from the date the service was provided to the patient). However, most insurance providers request much shorter windows for medical claim submissions. By incorporating an alert system within your practice’s workflow processes, you’ll know when a claim is approaching a deadline.

5. Duplicate Billing

Billing for the same treatment, test or procedure more than once will lead to a claim denial. While a majority of these billing errors are mistakes, health organizations are fined for fraud every year for this reason. Implementing chart audits and training your staff to double-check for inaccuracies will help reduce duplication errors.

It’s important to catch errors before billing claims to avoid denials and other revenue problems. Make it a team effort (and consult with your healthcare CPA) to identify these inaccuracies to ensure claims are dealt with in an effective, sustainable manner.

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