DENIED CLAIM
The refusal of an insurance company or carrier to honor a request by an individual or his or her provider to pay for health care services obtained from a healthcare professional is referred to as claim denial. Many practices do not bother to file an appeal when their claims are denied. According to the American Medical Association, the most common reason is that providers do not believe they will recoup enough from appeals to justify the administrative costs that a denial management process will impose on the practice. All that was required of the practice was an audit and an appeal of the denials.
NUMBERS OF DENIALS
- The average cost of reworking a claim is $25.00, according to the Healthcare Financial Management Association (HFMA).
- Payers deny 15 to 20% of all claims submitted in terms of gross charges.
- 65 percent of claim denials are never worked, resulting in a 3% loss of net revenue.
- Approximately 67% of all denials are appealable.
TYPE OF DENIAL
Soft Denial:
- A temporary or interim denial that may be paid if the provider takes effective follow-up action.
- Medical records are still being received.
- Denied because of missing or incorrect information
- Coding or billing issues
- Pending itemized bill Pending invoice receipt
Hard Denial:
- A denial that causes revenue to be lost or written off.
- Pre-approval is not required.
- This is not a covered service.
- Bundling
- Inadequate filing
Preventable/Avoidable Denials:
- A firm denial caused by action or inaction on the part of the service provider. It accounts for roughly 90% of denial.
- Inaccuracies in registration
- Ineligible Insurance
- Invalid Coding
- A medical necessity
- Credentialing issues
TOP REASON CODES FOR CLAIMS ADJUSTMENT
- 16: Claim is missing information or contains billing/submission errors.
- 96: Non-covered expense (s)
- 204: The patient’s current benefit plan does not cover this service/equipment/drug.
- 197: There is no precertification/authorization/notification.
STRATEGY OF ZERO TOLERANCE WITH YOUR DENIALS
Create a Zero Tolerance policy for denials that are preventable or avoidable. Process improvement efforts should concentrate on breakdowns in denials prevention processes such as patient information and insurance verification, inaccurate or missing documentation, and communication issues. Ensure that all employees are familiar with the terms of the payer contract. Non-emergency services should be scheduled at least a day in advance to allow for prior authorization.
If you have been denied Claims Management in your medical billing department or are not getting satisfactory results, contact WWS directly at +1(302)613-1356 to learn how we can assist you.