Medical billing is a complex process with plenty of room for errors that can result in expensive, denied claims. Healthcare providers need to prevent billing mistakes upfront to maximize reimbursement.
In this article we outline seven most common mistakes that lead to medical billing denials and solutions and how to avoid them using modern automated technology.
1. Inaccurate Patient and Insurance Information
Submitting claims with incorrect patient information is one of the most basic but common billing errors – misspelled names, incorrect Date of Birth (DOB), mismatched insurance ID numbers, outdated addresses, etc. The likelihood of denial increases if key identifying details on the patient claim form do not match the insurance company’s records.
Verification of all demographic and insurance information at the time of patient registration is the best way to prevent patient data errors. Real-time coverage-specific validation is possible through automated solutions that directly check coverage details and eligibility..
Patients also have the ability to check and update their personal information at any time through specialized access portals.
Furthermore, automated coverage tracking systems should also check for any changes in coverage during the treatment period to avoid surprise claim denials. Clean claim submissions rely on accurate patient data. Here’s more information on how to accurately verify insurance and track coverage changes: https://approvedadmissions.com/how-to-verify-patient-insurance-eligibility-and-benefits/.
2. Missing Required Documentation
Insurance companies require specific clinical documentation, consent forms, and other administrative papers to process claims. Each payer has its guidelines around necessary reporting details depending on the types of services rendered. Common documentation mistakes include missing physician notes, outdated patient consent forms, lack of itemized bill details, or absent proof of medical necessity records.
Billing staff need to carefully review payer requirements for documentation and coding for each claim submission. Automated documentation management tools can track missing forms and required reports for all patients, while integrated EHR systems ensure clinical records are accurately captured. Proactively gathering the necessary paperwork from both clinical and administrative sides is key to minimizing documentation-related denials in the future.
3. Late Claim Submission
In addition to accurate data and paperwork, medical claims must also be submitted in a timely manner. Each payer outlines claim filing deadlines from the date of service – for example, Medicare requires submission within 12 months, while some commercial plans specify only 90-180 days.
Missing filing deadlines is one of the most common reasons claims get denied, especially when providers are busy and have many patients. Setting up internal procedures to submit accurate claims soon after a patient is discharged can also prevent this frequent oversight.
4. Inaccurate Coding
Insurance reimbursement is heavily dependent on the accuracy of diagnosis, procedure and billing codes submitted on claims. Any mismatches between claimed services and medical necessity chart documentation can raise flags for denials.
Modern software tools help prevent claim denials by detecting coding errors that don’t match clinical records. Such tools can flag discrepancies so mistakes can be fixed before claim submissions.
5. Exceeded Coverage Limit
Verifying patient eligibility does not stop at simply checking active insurance status. For example, thorough check of patient’s coverage details can uncover that some limits have already been met.. Patients may also unknowingly continue care after their maximum covered visits, services or prescription refills are exhausted.
Automated insurance tracking tools provide greater visibility into changing coverage details. Claims can then be billed within specified limits to avoid denials. Real-time eligibility insights prevent providers from inadvertently exceeding reimbursable limits.
6. Unauthorized Out-of-Network Services
Seeking care from out-of-network providers is a common claim denial scenario for patients. Many health plans require pre-approval and additional paperwork when getting diagnosed or treated by non-contracted doctors or facilities.
Automated tools can streamline confirmation of patient benefits and pre-authorization requirements when going out of network. Such software can ensure the accuracy and completeness of pre-authorization submissions.
7. Duplicate Claims
As medical bills transition between different systems and staff, small data entry errors can easily occur that lead claims down the denial path. Common oversights include transposed procedure codes, inaccurate dates of service, mismatched charge details, or even submitting the same claim twice.
Automating claim generation and submission processes minimizes manual errors throughout the billing workflow.
The High Costs of Claim Denials
Billing errors can significantly impact provider revenue and profitability over time. Based on industry estimates, the average denial rate for medical claims runs between 6-13%.
Claim denials can have a number of consequences:
- Additional staff time: Claims denied for minor reasons like missing signatures often get quickly resubmitted but still represent wasted administrative time and effort tracking down errors that could have been prevented. Clinical teams also spend extra time contesting inappropriate denials that require added documentation.
- Higher AR days: Denied claims must work their way through lengthy appeals processes before getting paid, which slows down the speed of reimbursement. The cycle of correcting, resubmitting and reworking claims impacts the A/R days metric.
- Lower patient satisfaction: Unexpectedout-of-pocket costs from claim denials due to missed deductibles or copays may frustrate patients.
- Reputational damage: High denial rates signal systematic issues to payers, and providers can earn a poor reputation.
Preventing Medical Claim Denials with Automation
A large amount of claim denials may be prevented using automated software:
- Patient eligibility and coverage changes tracking: Real-time verification solutions instantly check patient coverage patient responsibility and track changes,
- Coding audits and charge capture: Integrated platforms validate appropriate codes, while automated charge reconciliation prevents data entry mistakes
- Claims editing and submission: Such tools review accuracy across all claim fields like dates, charges etc., prior to submission.
- Denials and appeals management: When preventive measures fail, tracking solutions classify denial reasons to guide resubmission while trend analysis identifies problem areas
- Coverage policy monitoring: Up-to-date repositories on payer requirements, billing codes and reimbursement policies help providers remain compliant
This multi-pronged approach combines both pre- and post-denial prevention measures spanning the entire revenue cycle.
