Denials in medical billing are the worst nightmare of any medical practice. This is because rejected bills lead to non-payments and thus financial problems.  Do you know that in 2021, there were 43.8 million denied medical claims which led to a lot of financial disruptions for the medical sector? 

US medical systems require every person to have medical insurance and thus medical staff and doctors are required to take their payment from the insurance companies. But getting this payment is a great hassle and causes a lot of frustration. 

Medical centers and practices need special strategies to combat this problem. This blog will explain some common denials in medical billing. We will also see how we can effectively solve all these problems.  Solving these denial issues will help you a lot in enhancing your revenue cycle management.

Getting medical billing audit services is one of the best decisions you can ever make. A lot of medical professionals choose medical billing partners. This is mainly because these companies can easily handle all the fuss for you so that you can concentrate on giving the best healthcare services to your patients.

Diligent Systems is one of the best companies in this regard. We stand out as the number one medical billing audit company in the USA. With a proven track record in medical billing audits, we are ready to take on another challenge with you. 

What is Meant By Common Denials In Medical Billing?

Medical billing is a thorough process that includes different steps. The main steps in medical billing are information collection, documentation, coding, super bill generation, and then at last we have claim submission. After claim submission, we have claim acceptance or rejection steps.

Insurance companies can easily reject or deny a claim based on any simple mistake. A single mistake in your coding can lead to claim rejection. This is called claim rejection in medical billing. There are many common denials in medical billing. You need to know about them to prevent them.

Types of Rejections in Medical Billing

Hard denials and soft denials are the two types of common denials in medical billing.

-Soft Denials: Soft denials are temporary in nature, amendable and resubmittable. Minor mistakes like missing data, inaccurate patient information, or coding errors are the cause of these. The claim can be reprocessed after it has been corrected.

-Hard Denials: Hard Denials cannot be resubmitted and are final. They are caused by things like missing filing deadlines, non-covered services, and lack of medical necessity. An appeal with supporting documentation is frequently necessary for hard denials.

Healthcare providers can increase claim acceptance rates and guarantee a consistent revenue flow by taking corrective action after learning about these denial types.

Top Common Denials in Medical Billing and Their Solution

Medical healthcare centers face many different types of medical appeal denials. Some of the most common denials in medical billing are listed as follows:

We will also see different solutions to these common denials.

1. Denying Because of Inaccurate or Missing Patient Data

Inaccurate or absent patient information is one of the most frequent causes of medical billing denials. A claim may be denied for even minor errors, like a misspelled name, an inaccurate birthdate, or an out-of-date insurance policy number. 

For insurance companies to properly process claims, precise information is essential, and any discrepancy may result in needless payment delays.

Healthcare providers should always confirm patient information prior to filing claims in order to prevent such problems. To make sure that all the information matches the insurance provider's records, automated verification tools can assist in checking for errors. 

The likelihood of denials owing to inaccurate information can also be decreased by teaching staff to thoroughly examine patient data before submitting it. 

2. Refusal on the grounds of incorrect coding (CPT, ICD-10, HCPCS)

Inaccurate coding is a significant contributing factor to claim denials. To describe the procedures and diagnoses associated with a patient's treatment, medical billing uses codes like CPT, ICD-10, and HCPCS. 

The claim might be rejected if the incorrect code is entered if the codes don't match the diagnosis, or if the codes are out of date.

It is crucial to keep billing employees informed about the most recent coding changes in order to avoid such mistakes. Keeping up with the latest changes to medical coding standards can significantly impact the approval rates of claims. \

Before filing claims, accuracy can also be ensured by using coding software. Additionally, frequent training sessions for employees can assist them in comprehending and utilizing the appropriate.

3. Duplicate Claim Submission Denials

If you submit one claim more than one time it can also lead to claim denials. Insurance companies are highly sensitive about claim submissions. If you submit one claim more than one time this may lead to fraud and mishaps.

This is why it is very important to track your claim application. If you track your claim application on time, you can prevent these problems. You should use a claim management system to track down your applications.

4. Denying Because of the Absence of Medical Need

If the insurance company determines that a procedure or treatment is not medically necessary, medical billing claims may be rejected. This frequently occurs when there is not enough documentation to back up the need for a specific service. 

The payer may decline to pay the claim if they do not find convincing proof that the treatment was necessary for the patient's health.

Healthcare professionals must make sure that all medical records unequivocally support the procedure's necessity in order to avoid this kind of denial. Doctors ought to take thorough notes outlining the patient's illness, symptoms, and the necessity of the treatment.

An appeal can be filed with more supporting documentation, like test results, if a claim is rejected for this reason.

5. Denials of Eligibility and Pre-Authorization

Prior authorization from the insurance company is necessary for certain treatments and procedures. A healthcare provider's claim might be rejected if they don't get this authorization. Furthermore, claims may be denied for services that exceed the patient's insurance coverage limits.

Before scheduling any treatments, it is essential to confirm all insurance requirements in order to prevent pre-authorization and eligibility denials. Later problems can be avoided by verifying with the insurance company whether a procedure requires pre-approval. 

In a similar vein, confirming a patient's coverage prior to providing services guarantees that the procedure is covered by their plan. Healthcare providers can reduce denials and prevent needless financial losses by implementing these measures beforehand.

6. Prompt Denials of Filing

The insurance company has a deadline for submitting medical billing claims. A claim that is submitted after this date will be rejected, costing the healthcare provider money. Even legitimate claims may not be reimbursed if these deadlines are missed because many payers have stringent policies regarding timely filing.\

It is crucial to monitor payer-specific deadlines in order to prevent this kind of denial. Keeping an orderly system is essential because each insurance company has different deadlines for filing claims. Billing software and automated reminders can help guarantee that claims are filed on schedule. 

Additionally, healthcare providers ought to have a procedure in place for promptly addressing and resubmitting any denied claims. 

7. Benefits Coordination (COB) Refusals

Coordination of Benefits (COB) denials can occur for patients with several insurance plans. This occurs when insurance companies cannot agree on which policy should be billed first. 

A lack of coordination between the insurers may result in the claim being rejected if the primary and secondary insurance information is inaccurate or out-of-date.

Healthcare providers should confirm primary and secondary insurance information at each patient visit to avoid COB denials. Confusion can be avoided by making sure the proper billing order is followed. \

In order for patients to give correct information, they should also be informed about COB requirements. Medical practices can prevent needless claim denials and guarantee efficient reimbursement procedures by outlining insurance details upfront.

How a Medical Billing Audit Company Can Help Improve Claim Denials

By finding mistakes, streamlining procedures, and guaranteeing adherence to insurance regulations, a medical billing audit firm plays a critical part in handling claim denials.

Healthcare providers may suffer financial losses as a result of denied claims; however, by thoroughly reviewing billing practices, an audit firm can help reduce these problems. In order to address recurrent errors, they examine previous denials to find common patterns.

Making sure patient data, coding, and documentation are accurate is one of the main ways an audit firm can assist. Inaccurate patient information, missing pre-authorizations, or coding mistakes result in the denial of many claims. An audit firm lowers the possibility of such errors by going over documents and putting verification procedures in place.

One of the best medical billing audit companies in the USA is Dilijent Systems. Dilijent Systems stands out as one of the most reliable medical billing companies in the USA. Our long list of clients who speak testimonials to our credible services. 

Summary

Medical billing denials are the most hectic part of revenue cycle management. The above blog displayed the common denials in medical billing. We also saw how we can resolve all these denial problems.

Getting a medical billing audit company is a nice solution. Diligent Systems stands out as one of the most credible medical billing companies in the USA. We offer affordable and reasonable pricing strategies that will fit your budget.

FAQs

How to solve denials in medical billing?

Denials in medical billing can be solved by going to a professional medical auditor. Other than that, you can also opt for a medical billing audit company. A company has all the trained staff that will help you in getting the desired results.

What are the most common denial codes in medical billing?

There are a lot of denial codes in medical billing and thus, you should try to prevent them at all costs. The most common rejection codes are 4, 11, 16, 18, 22, 27, 29. 

What are possible solutions to a denied claim?

There are a lot of solutions to a denied claim. You can opt for a professional medical biller. As well as you can also go for a medical billing audit company to solve all your matter.