Medical Billing

# Addressing Denials: Effective Strategies for Medical Billing

- June 28, 2024
- Posted by Brian Bertrand

28 Jun

Medical billing is an intricate process that demands precision, accuracy, and understanding of coding and billing. Any irregularity found in the medical bills submitted to the insurance company can lead to claim rejection or denial. It is reported that 20% of submitted claims go into the denial basket, causing revenue loss for the healthcare organizations. In small medical practices, 2% of net revenue gets lost due to claim denial.

Claim denials affect the cash flow and stability of the business and discourage healthcare providers from investing in the quality of patient care. Therefore, it is recommended that you have a complete understanding of the billing process to ensure it goes smoothly. In this article, we will learn the reasons behind claim denial and discuss effective strategies for medical billing to mitigate this issue for good.

# Understanding of Denials

Denials refer to the rejection of requests sent to the insurance companies for reimbursement in return for medical services provided to the patients. There can be a number of reasons behind the claim denial, and great care and attention should be given to building strategies to minimize the claim denial rate for the welfare of healthcare organizations. Denials can be of two types:

#### 1. Hard Denials:

These are types of denials that cannot be reversed even after the resubmission of claims. These denials may be claims with non-provided healthcare service, duplicate service, or submission after the deadline.

#### 2. Soft Denials:

These are types of denials that can be appealed and reimbursed after meeting a few protocols. The reasons behind these denials can be incomplete information, wrong coding details, or missing documents.

## Common Reasons for Denial

1. Incomplete or Incorrect Information: Incomplete information regarding the patient’s demographics, medical history or coding can be the significant and common cause of denials. Errors in the patients’ data or coding can also stand out as a reason for denial.
2. Lack of Medical Necessity: Insurance companies assess the total medical reports and history of patients and then go for reimbursement cycles. If they find that the performed medical service was not necessary in the treatment plan, then they have every right to deny the request.
3. Lack of Insurance Coverage: Patients come with insurance cards, and it is unwise to start the treatment on the basis of that card. The insurance can expire, or it may not cover some specific services. That’s why providers should check the coverage before starting with medical treatment. Out-of-coverage claims can be rejected and cause revenue leaks.
4. Timely Filing: Healthcare providers are given a specific time of 15 days to one year to submit the claims for healthcare services. If they fail to submit a claim in the given time frame, then they will not be reimbursed due to denial of claims.
5. Duplicate Claims: It has been seen that claims are submitted twice accidentally or due to any error in the automated system, and these types of claims are rejected as hard denials. Duplicate claim submission results in resource waste and an increase in administrative burden.

## Effective Strategies for Medical Billing and Claim Denials

Though claim denial is a serious issue, it can be reduced by implementing powerful strategies. Denials should be addressed effectively, and the objections should be corrected through denial management by trained staff.

### 1. Preventive Measures

- Accurate information: Collect and store accurate patient information at the time of appointment and visits for checkups. Patient information should also be verified and updated by undergoing questioning from patients.
- Thorough documentation: It is important to note every piece of information related to the patient’s biodata, medical history, medical treatment and investigation plans. The services provided should be documented in order to provide verification at the time of medical billing.
- Appropriate coding: Compliance with the coding policies is necessary, and codes should be assigned according to the latest ICD-10, CPT, and HCPCS codes. Timely audits are also important in this process.

### 2. Effective Denial Management:

- Analyze Denials: After receiving denials from the insurance companies, they should be classified according to the type and reason. The trends and patterns should be determined in order to understand the root cause of denials.
- Implement a Denial Management System: A denial management team should be made whose function is to manage and determine the denials. The team will be responsible for clearing the objection and alarm the healthcare providers about persistent problems, if any.
- Appeal Process: Soft denials will be appealed again by providing accurate information asked by the insurance companies. Follow-up should also be ensured to check the resolution process.

### 3. Ongoing Education and Training

Continuous education and training of staff members should be ensured to keep them updated on new regulatory policies and rules. Staff should be encouraged to attend the training sessions about the payer policies, coding updates and denial management plans.

Coding experts can be hired to train healthcare providers in coding policies and coding assignments for specific healthcare services. Feedback from the payers can help a lot in evaluating the improvement rate and common issues.

### 4. Leveraging Technology

Manual systems for medical billing and coding have become outdated, and they should be replaced with technology like EHR and billing software in each healthcare organization. Electronic health records can benefit providers by streamlining the whole billing process with an automated documentation process.

Billing software is very effective, from making bills to tracking the claims for reimbursement. Billing software can help billers by allowing them to undergo automatic medical bill formation, claim submission, and appeal for denials. These tools can also detect errors or irregularities in the billing process, reducing the claim denial rate.

### 5. Good Payer Relation

Good relations with the payers can help to undergo a quick and headache-free billing process. Often, claim denials are due to a poor understanding of the rules set by the payers. The communication barrier is the main reason behind it. Meetings should be scheduled with the insurance company staff to discuss policies and clear disputes. Regular contract review is also necessary to suggest favorable terms to the payer for the billing process.

## Conclusion

Claim denial is a very bitter aspect of the medical billing process for healthcare providers, as denials give financial setbacks. There are many reasons behind denials, including incorrect information, duplicate claims, lack of insurance coverage, end of the deadline and so on. Strategies should be adopted to overcome the denial problem. Proper documentation and coding, staff training, and good payer relations can prove beneficial in this regard. Implementation of denial management systems and technology are also effective in reducing denial of claims.

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