Denied claims slow down payment, create stress for your patients, and increase work for your staff. Reducing your volume of denied claims benefits your practice at every level. Read on to learn how to reduce claim denials and how much this benefits your bottom line.
Why is Reducing Denied Claims Important?
As a physician or practice, you want to work toward shrinking your claims denial rate. When an insurance company or carrier denies health services claim, you are in a problematic situation: you don’t get paid, or your patient must pay out-of-pocket.
Delayed payments negatively impact your cash flow; this directly affects your ability to cover facility costs, expenses, payroll, and, ultimately, your bottom line. You need claims to be filed the first time accurately because you rely on those claims payments to run your practice.
With careful management and support, you can significantly reduce your number of denied claims. Our team has compiled a list of our top seven tips to optimize claims filing so you can promptly receive compensation.
Tips to Reduce Denied Claims
Collecting Accurate Patient Info
During the patient intake process, you must collect complete demographics and insurance information. Collecting accurate patient information is the foundation for a robust claims process.
Essential patient demographics include:
- Date of birth
- Phone number
- Name of the insurance company
- Name and date of birth of policy holder
- Policy number
- Group number
Securing a copy of the patient’s insurance card is essential. For repeat clients, the best practice is to ask for a copy of the insurance card at every visit and compare it with the data in your system. The offices that don’t employ this practice are the ones that see multiple claims denials due to inaccurate patient demographics in their system.
If your office sees consistent denials –– or a sudden uptick in denials –– then there’s likely an issue with intake processes. Providing feedback to your front desk staff following multiple claims denials helps them determine the root of the problem, make necessary adjustments, and collect the information required for clean claims in the future.
Verify Insurance and Eligibility
After you have collected patient and insurance information, the next step is to verify patient insurance and eligibility according to their plan.
Patients often present with an insurance plan that has been terminated. Practices then file claims for inactive insurance, and those claims are denied. This is a waste of valuable resources. Sound practice management software systems will verify eligibility with a click of a button and autofill the information into the database. Signing into the payer’s portal is another quick way to determine if the patient’s plan is active.
Your office needs to know the patient’s coverage for services rendered. Answering the following questions helps you reduce denied claims while enhancing the patient experience:
- What is the copay?
- Does the patient have coinsurance?
- What is the patient’s deductible, and how much has it been met?
- Does the plan cover the types of services the patient is coming in for, or will the patient have to pay out of pocket?
Verifying insurance and eligibility before you bill the claim reduces friction in the claims process, resulting in prompt payment for your practice.
Determine Referral Needs
Do patients need a referral or authorization when they come in for care? Do they need the service approved or verified from a medical-necessity perspective?
Depending on where the patient is seeking treatment, if a primary care doctor is referring to a specialist, there must be a referral authorization for the patient to receive specialized care. Your practice is responsible for calling the payer to acquire these authorizations before you provide specialized care to your patients. The payer may disapprove if you attempt to obtain authorization after providing care. In this case, your practice isn’t paid, or the patient must pay out of pocket. Suppose you don’t proactively determine referral needs, and your patient is left covering the total cost. In that case, your practice will likely suffer the loss of a patient and the impact of negative reviews detailing their experience.
Ensure Appropriate and Accurate Coding
Both CPT and ICD10 codes are required when submitting claims to payers. Some payers expect services and items to be coded differently, so your practice needs to know the nuances of various insurance plans’ demands and requirements. Your contract with the payer also dictates what codes you can bill. When you understand unique payer expectations, you can code accurately and file a clean claim, receiving prompt payment in return. In addition to clean claims, appropriate and accurate coding helps ensure your practice remains compliant. Maintaining compliance in your billing is a critical step toward protecting your practice.
Submitting Claims on Time
Every insurance plan has rules and timelines for claims submission. Make sure you’re meeting timely filing requirements. The claim will be denied if the payer receives a claim outside the timely filing date range. If you are contracted with payers, your contract states how long your timely filing period is. It can be as short as 90 days from the date of service. Missing this deadline causes lost revenue for your practice, as it is challenging to fight denials for claims that weren’t filed in time.
In addition to the initial filing deadline, there are separate deadlines for submitting corrected claims and appeals. If a claim was filed on time but denied because something on the claim needs to be corrected, you must submit a corrected claim or an appeal within a designated timeframe. Check with the payer to find out how long you can fight the denial; otherwise, your claim won’t get paid, and you will lose revenue.
Proper Claims Follow-Up
Implementing proper claims follow-up protocols is one of the critical steps to protecting your cash flow. However, many medical practices put more emphasis on claims submission, often procrastinating much-needed claims follow-up.
A best practice is to have a separate team whose primary responsibility is to work each outstanding claim on the Accounts Receivable every month until the claim has been processed correctly. Claims specialists should start follow-up when the claim is 30-45 days old, eliminating the need to call on claims paid upon the first submission without any follow-up. Specialists check payer portals for claim status and call insurance companies to send unprocessed or inaccurately denied claims back for proper processing. If those steps don’t work, specialists aggressively appeal denials through the proper appeals channels set by the payers. These claims specialists should keep careful track of all their notes about each claim in the billing software system. Excellent claims follow-up protocols will ensure your practice doesn’t lose valuable revenue.
Monitoring and Looking at Data
Access to claims denial data empowers you to understand the cause of your denials and how to work with your team to implement processes that eliminate needless, preventable denials. By analyzing that data, you can discover weak spots and points of risk. Then you can implement workflows to prevent those types of denials from happening again.
What percentage of your claims are coming back denied? Learning that number is an excellent first step in your data evaluation. Whatever the rate is, determine practical steps to reduce it. The problems behind the denial rate can be identified by scrutinizing your protocols for the above steps.
The fewer denied claims you submit, the faster you will get paid. Prompt payment improves your cash flow, culminating in a better bottom line for your practice. Lower denial rates typically translate to lower days in Accounts Receivable; “days in A/R” is another significant metric to be aware of at any given time.
Let Larsen Billing Reduce Your Denial Rates and Streamline the Billing Process
Reducing denied claims will improve the financial health of your practice. You focus so much on patient care that you don’t have the capacity to create workflows and processes, analyze claims data, and follow up on every claim that didn’t pay correctly.
That’s where a medical billing company like Larsen Billing comes in. Our experienced team has the talent, expertise, and skill set to handle your billing and claims. We employ processes to ensure accuracy and compliance at every step.
Our team partners with practices like yours to:
- Develop an efficient process to collect accurate, up-to-date patient information
- Provide effective tools for verifying eligibility and benefits
- Implement a process for obtaining referrals and authorizations
- Ensure your claims are coded correctly and billed according to payer guidelines
- Submit your claims as quickly as possible, meeting timely filing deadlines
- Follow up on all your outstanding claims each month and report our progress to you
- Meet with you regularly to analyze your claims data and identify areas of improvement
Our team has certified coders who ensure your coding is completed accurately and complies with all regulations and standards. We conduct chart audits to ensure all documentation meets the level of code submitted. Our workflows and audits guarantee that your claims are submitted on time. We aggressively follow up on your claims and fight all inappropriate denials. Our analytics team evaluates your data to monitor your practice’s health and ensure you are getting paid accurately for all the care you provide.
Let our seasoned team handle your billing and claims. We have the expertise to ensure your claims are filed the first time correctly, giving you peace of mind as you invest your energy in patient care.
Contact our team to learn more about how Larsen Billing can serve your practice starting today.