Preventing Denials

/ February 22nd, 2011/ Posted in Health / Comments Off on Preventing Denials

How To Avoid Denial

Common Problems and Solutions

Knowing proper claims submission procedures can help maintain financial efficiency and relieve patient anxiety concerning claim denials. Industry sources indicate that submission errors cause the great majority of initial claim denials or underpayments. In addition to submitting claims immediately following service, reviewing the attached reasons for claim denials or underpayments can be helpful in avoiding problems. For example, one Medicare Part B carrier reports that 57 percent of all claims successfully appealed were initially denied because of submission errors.

It also helps to keep informed of changes in state insurance laws, Medicare coverage, and the coverage policies of major insurers. For up-to-date information on Medicare, it is important to read your Medicare Part B Bulletins and/or attend educational seminars sponsored by your local carrier. Other payers may also publish provider bulletins, for which your office can be added to the mailing list. Many payers, including Medicare, have websites where their coverage policies and appeals processes can be obtained.

The Appeals Process

When an insurer denies or underpays a claim, first examine the original claim and the Explanation of Benefits (EOB) to determine whether there is inaccurate or insufficient information. Claims denied for these reasons can simply be resubmitted with the corrected or additional data required.

Should a payer deny a claim for some other reason, consider filing an appeal. Industry sources indicate that only 10 percent of claims are appealed, but that 90 percent of appeals are successful. In fact, according to an Office of the Inspector General report, there has been an increase in appeals to Medicare at the Administrative Law Judge (ALJ) level (99% increase); of these appeals, 81% were overturned.

By law, all payers must have a procedure for filing appeals. Below is the process for filing an appeal for claims submitted under Medicare Part B. The process begins with a request to review the claim and, if needed, can progress to a hearing at various levels. Note time and claim limits on various levels of the appeal process.

When a denial or underpayment is received from a payer, it’s often necessary to review the original claim submitted to the payer along with the EOB to identify and correct the problem. By doing this type of analysis, you can determine if there was a simple coding error or if the denial was based upon something else, such as the payer’s coverage policy on a specific procedure or product. Here are some items to keep in mind when reviewing the original claim and EOB.

1. Original Claim Analysis
Review the claim to ensure that all codes are complete and accurate
ICD-9-CM codes are listed and coded to the highest level of specificity (don’t use a general ICD-9 code when a more specific code is available)
ICD-9-CM codes are linked to each service line on the claim
J and Q codes for drug products are listed and units are accurately billed
CPT codes reflect the services provided during the patient encounter
Modifiers are used as necessary
Make sure to use the most recent volumes of each of the coding books as a reference; out of date codes can result in denials
Examine your charges; most payers will reimburse the lesser of their allowable or your charges
Verify that date of service and place of service are correct
Include correct name and provider identification numbers of both referring and treating providers on the claim
Be sure you’ve billed the right payer, especially if the patient has primary and secondary insurers
Confirm you have the signature of the patient on file and the treating physician’s signature on the claim

2. Explanation of Benefit (or Remittance Notice) Analysis
Determine why the claim was denied by analyzing the denial codes, which are usually on the bottom or back of the EOB
Cross reference actual reimbursement from payer to their allowables to determine if claim was underpaid, paid correctly, or overpaid. Allowables are often published in provider bulletins or in your contract with the payer
If the payer has changed any of your codes, you may want to go back and critique how you’re using those codes and whether they are being used appropriately
Take care to file appeals within the time constraints of the payer (for Medicare, the limit for appeals is six months from the date of denial)


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