Medical billing involves many procedures, and denials are the most difficult issue in this sphere. The denials in medical billing affect cash flow and also cause more work to be done.
Of course, not all types of denial are equal. They are of different categories; they have their motives, and they have their solutions. Knowing these types allows the healthcare providers to act appropriately to prevent them and also make sure they collect the payments on time.
Keep reading this informative guide and learn about various types of denials that exist in medical billing. We will also have a look at the benefits of outsourcing your denial management services. See how a reputed company can handle and solve your denial management issues.
What Are Denials in Medical Billing?
In medical billing, denials occur when your payment is rejected for a particular claim. This can happen for many reasons. However, some of the reasons include minor mistakes in entry or other clerical errors, such as incorrect patient details or lack of records. On other occasions, the denials could result from complications, including coverage limits or policy exclusions.
Such denials can be inconvenient and drain healthcare providers’ time. They can lead to late payments, reduced revenues, and additional administrative costs. That makes it important to find out why some appeals are denied in the first place. This means that if healthcare providers can identify and address these causes early enough, they will be able to control the ration of medical denials.
Denial management in the healthcare industry is important for faster payments and more efficient billing.
Common Types of Denials in Medical Billing
Familiarizing with the most frequent denials will help the healthcare provider detect and solve the problem effectively. Here are some of the most frequent denial types in medical billing:
1. Patient Information Errors
One of the most common reasons that claims are denied is due to the incorrect patient’s information.
Incorrect Patient Details: Patient name errors, date of birth errors, or insurance number errors will result in a denial.
Missing Information: Lack of complete identification data, including the address and telephone number of the patient.
2. Coding Errors
Billing depends closely on coding, and therefore, it is very important to get it right. Codings are frequently associated with denials due to some mistakes.
Incorrect CPT or ICD Codes: Incorrect Current Procedural Terminology (CPT) or International Classification of Diseases (ICD) codes also cause payment problems.
Upcoding or Downcoding: Any code given higher or lower than the service provided can lead to denial or audits.
3. Eligibility Issues
Patient visits or treatments can be denied if there is an insurance issue. However, denial management services can handle this issue if addressed properly.
Coverage Not Active: Any attempts to practice this tactic to bill for a particular patient and get a reply that the insurance is inactive will lead to denial of the claim.
Services Not Covered: Some services may not fall under the patient’s insurance policy. Therefore, it causes denial.
4. Medical Necessity Denials
Insurance organizations demand the services billed are indeed necessary for the client’s health.
Services Not Deemed Necessary: It happens when the insurance company believes that there is no need for that service.
Lack of Supporting Documentation: Failure to support your service with adequate substantiation of medical necessity automatically leads to a denial.
5. Timely Filing Denials
The deadlines for submitting claims are very tight. Failure to meet these deadlines leads to denials, and then the case will go into the hands of denial management in healthcare.
Claim Submitted After Deadline: Different insurance companies have unique times to submit claims. This is because, most of the time, any late submission is not considered.
6. Authorization and Referral Denials
Some of the service provisions may only come after a recommendation from a qualified primary care physician.
Missing Pre-Authorization: Lack of pre-authorization required for specific procedures also results in denial.
Required Referrals Not Obtained: However, to increase one’s chances of not having the insurance plan denied, some details need to be met, and one of them is referral; applying at a time when one does not have a referral means that the insurance plan will be denied.
7. Duplicate Claims
If you repeat the same loss claim, the company will consider it as fraud. And this will result in rejection.
Repeated Submissions: Claiming reimbursement for the same service can lead to rejection of the claim to avoid overpayment.
8. Co-ordination of Benefits
If a patient has different insurance policies, then it is important to have coordination between them.
Primary Payer Not Identified: The major problem is identifying the main insurance plan; otherwise, the claims will be rejected by the second insurer.
Incorrect Benefit Information: Lack of proper coordination of benefits messes up one’s plans and results in denied claims.
Outsource Your Denial Issues to DWP Medical
Each healthcare practice requires a certain approach, which is why DWP Medical offers unique denial management services. They mostly engage with your team to establish typical explanations for denial. They create the most effective approaches to handling resubmissions.
It’s not the end here! Outsourcing denial management to DWP Medical means that providers can provide their primary service and comfortably leave the complicated business of denial management to the specialized service providers.
Final Thought
Sometimes, it gets difficult to recognize certain diagnoses, and a wide range of denials can significantly delay healthcare organizations’ operations. Plus, they affect cash flow and generate additional work. To begin with, there is a need to understand the various kinds of denials and the reasons underlying all the processes that precede them.
These types include coding mistakes, eligibility concerns, and missing authorizations. There is a way to make this process easier and faster, though – by cooperating with other companies that specialize in denial management, such as DWP Medical.
When suitable solutions are implemented, it will be possible for healthcare practices to deal with billing issues. In addition to this, it becomes easy to reduce revenue loss and dedicate more time to providing care.