Why Are Your Medical Billing Claims Denied? How Can We Help?

Do you often ask yourself these questions?

What percentage of your claims are denied every year? How do you handle revenue losses? Are you always looking for ways to reduce claim denials and improve your revenue cycle management (RCM) process?

In a 2019 analysis by CMS, 18% of in-network claims were denied by insurers. Denial rates varied widely, from less than 1% to over 40%. It was also found that denied claims are rarely appealed, and when they are, insurers usually uphold their original decision. According to MGMA, 25% of all unpaid claims are never followed up on. This leads to heavy revenue losses and negatively impacts the RCM process.

Many practices work hard to minimize lost reimbursements and denials. AltuMED ensures and validates patient insurance details from the moment they request your service. Our employees verify patient insurance details and check if the required treatment will be covered. Our software comes with pre-loaded ICDs and CPTs to help doctors enter diagnosis and procedure data quickly and without errors.

5 Steps to Lower Your Patient Claims Denial Rate

Know your current denial rate: To calculate your current denial rate, add the total dollar amount of claims denied by payers within a given period, and divide that amount by the total dollar amount of claims submitted in the same period. For example, if your total denied claims amount is $10,000 and your total submitted claims amount is $100,000, your denial rate is 10%. Calculate your denial rate by payer, reason for denial, provider, specialty, and location if your practice has more than one.

Identify the major reasons for your denials: The reasons for denials will vary by specialty and practice. Start by compiling your claim adjustment reason codes. These codes may be confusing, but they provide a foundation for a denial management strategy. Map these codes to more understandable reasons so you can find the root cause of the problem.

Common reasons include:

• Claim not submitted on time
• Demographic errors (wrong name or date of birth)
• Duplicate claim
• Eligibility expired
• Incorrect insurer address
• Incorrect modifier
• Invalid procedure or diagnosis code
• Lack of medical necessity
• No referral/authorization
• No supporting documentation
• Service not covered
• Wrong insurer billed

Hire a Revenue Cycle Manager or Certified Medical Coder: This person can help track denials and improve your chances of submitting error-free claims. They can:

• Clarify code combinations, definitions of modifiers, documentation requirements, and more
• Validate codes chosen by the physician in the EHR
• Find missed charges based on progress note documentation

Create a Multi-Disciplinary Denial Team: Include the practice manager, a representative from registration, a coder or biller, and at least one physician. Team goals should include:

• Collecting data about denials and verifying the ability to extract this data from your practice management system
• Reviewing data to identify trends
• Creating a standardized workflow for handling denials with a step-by-step action plan

Focus on Staff Education: Many practices benefit from educating their staff on topics like:

• Accurate data entry, including complete demographic and insurance information
• Policies and procedures for insurance coverage and eligibility
• Documentation requirements for ICD 10 specificity
• Frequency/global rules for specific procedures, including modifier usage
• How to properly fill out Advanced Beneficiary Notices (ABNs) and what patients need to know at the time of service
• Understanding your denials helps identify specific areas for improvement. By addressing these areas, your practice can improve processes and reduce risks.

How AltuMED Can Help

AltuMED's PracticeFit software optimizes the claim management system, increasing revenue. We ensure thorough checks on patient eligibility, analyze their insurance, and monitor discrepancies. If any errors are found, our scrubber, powered by AI and ML algorithms, can fix them. Our software has 3.5 million edits pre-loaded and issues automatic updates on the status of in-process claims.

AltuMED PracticeFit is a cloud-based, easy-to-use claim management software that reduces denial rates to 2.1%. To learn more, schedule a demo today.