Why Claims Are Denied

July 15, 2020

Submitting claims to insurance payers can be a time-consuming task. Medical practices that are understaffed often take a while to submit their claims, which in turn reduces their revenue since this means that it will take a while to get paid.

Additionally, when you have staff that’s submitting claims as only one of their responsibilities, there’s more risk that they will make errors that will result in claim denials. Claim denials can cause your practice to lose revenue, specially if you don’t appeal them properly. It’s why you should strongly consider outsourcing your medical billing and collections services.

Why Claims Are Denied

It’s worth noting that claim denials are different than claim rejections. Claim rejections occur because the claims that were submitted are missing certain data or have basic formatting errors. Rejected claims can’t be processed by the insurance company. It’s relatively easy to resubmit a rejected claim – all you need to do is to correct the error.

A claim denial is a bit more tricky. Claim denials result from claims that were received and processed by the insurance company but then denied for one reason or another.

Once a claim has been denied, you will have to figure out why the claim was denied and then write up an appeal or reconsideration request. If you resubmit the claim without an appeal or reconsideration request, the claim will just be considered a duplicate and will simply be rejected again, costing you both time and money.

There are a number of reasons why a claim can be denied. The following are a few of the most common reasons:

The claim is a duplicate

Any claims that are for the same service provided, on the same date, from the same provider, for the same beneficiary and during the same encounter will be denied as a duplicate claim.

The service isn’t covered

If the service provided to the beneficiary is not covered by the insurer, it will be denied.

Wrong information is used

If the codes are wrong, the modifiers are missing or the social security number is wrong, the claim will be denied.

The limit for filing has expired

Once the service has been provided, you have a certain amount of time to file the claim. If you submit the claim past that time limit, it will be denied.

How Outsourcing Can Reduce Claim Denials

If your claims are being denied because the limit for filing has expired, then it means you’re most likely understaffed. This should be the last thing that’s causing your claims to be denied. Outsourcing, in this case, can help you to reduce claim denials without having to take on more staff.

Additionally, when you outsource, you can trust that your claims will be submitted without error. Eliminating errors is one of the most effective ways to reduce claim denials, thereby saving time and helping you to increase your revenue cycle. Errors are more likely to happen if you staff that are responsible for more than just your claim submission process.

Last but not least, when claims are denied, writing an appeal can be especially time-consuming. Your staff will need to not only be well-educated but will need to do additional research to find out why your claims were rejected in order to write an effective appeal. A medical billing and collection service will ensure that all claim denials that do occur have a good chance of being properly appealed.

Claim denials can have a big impact on the revenue of your practice. ProMD Practice Management is happy to help with your billing assessment needs so you can maximize profits and increase patient satisfaction. To learn more about how ProMD can make your practice run like a well-oiled machine, call 888-622-7498 or fill out our online form to request a billing assessment.

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