10 Common Medical Billing Mistakes That Cause Claim Denials
Avoid costly claim denials by identifying the most common medical billing mistakes medical billers often make. Discover solutions to improve accuracy!
Denial Management and Appeals
Claim denials pose significant challenges for healthcare providers, hindering financial growth and disrupting cash flow. When claims are denied, practices face delays in payment, increased administrative costs, and the risk of transferring costs to patients, which can lead to dissatisfaction. Addressing these denial issues is crucial for ensuring timely compensation for services rendered. Understanding the common reasons behind insurance denials in medical billing can help practices implement effective prevention strategies.
Here, we provide the 10 most frequent medical billing mistakes that lead to claim denials and offer practical solutions to streamline the billing process and enhance revenue cycle management.
1: Claims needs more specific information:
Each diagnosis must be coded precisely, utilizing the maximum number of digits available for that particular code. It’s essential to be aware that ICD-10 codes now require details such as anatomical location and laterality (right or left side) to be included in the code description.
2: Incomplete Claims Information:
Claims can be denied due to missing information, encompassing various details. The most frequently omitted items include:
- Date of accident
- Date of medical emergency
- Date of symptom onset
3: Claim Exceed Timely Filling Limits:
Submitting a claim within the specified time frame is crucial; failure can lead to denials, even if the claim is otherwise accurate. It's essential to familiarize yourself with your payers' filing deadlines.
Notably, the Affordable Care Act has reduced the timeframe for submitting Medicare claims from 15 to 27 months to 12 months. The "From" date on the claim form, which indicates when the service was provided, serves as the start date for the claim. Claims must be received by the appropriate Medicare processing contractor no later than one calendar year from this date. If a claim is sent before this deadline but arrives after, it will be denied.
Understanding the process for addressing timely filing issues is vital. Knowledge of what supporting documentation is required for reimbursement can significantly impact your ability to appeal denied claims due to late submission. It's important to recognize that both Medicare and commercial payers have different guidelines regarding timely filing.
Key Changes Under Medicare
According to Section 6404 of the Patient Protection and Affordable Care Act (ACA), all Medicare fee-for-service (FFS) claims for services rendered on or after January 1, 2010, must be submitted within one calendar year from the service date. Claims submitted more than one year after the service date will be denied or rejected for exceeding the timely filing limit.
Additional Considerations
- For institutional claims covering a range of service dates (indicated by a "From" and "Through" date), the "Through" date will determine the filing deadline.
- For professional claims (such as those submitted via CMS-1500 forms or 837P) that include span dates, each line item's "From" date will dictate filing timeliness. Be cautious: if any line item's "From" date is untimely, Medicare may split the line item, denying the services rendered during the untimely period.
4: Incorrect Patient Identifier Information
Ensuring accurate patient identification is crucial in billing to prevent claim denials. Common errors include misspellings of the patient's name, incorrect date of birth, and mismatched gender information. Additionally, verifying that the correct insurance payer is selected and the policy number is valid is essential.
Always check if the claim requires a group number and confirm that the patient's relationship to the insured is accurately recorded. Moreover, ensure that the diagnosis code aligns with the procedure performed. In cases involving multiple insurance policies, indicate the primary insurance to avoid confusion and potential denials. These precautions will help streamline the billing process and reduce the likelihood of claim denials.
5: Coding Issues
Coding errors can lead to claim denials and significant revenue loss. Utilizing outdated coding resources or books either CPT (Current Procedural Terminology), ICD-10 (International Classification of Diseases), or HCPCS (Healthcare Common Procedure Coding System), can result in incorrect claims submission. Ensure that your coding team uses the most current codebooks and that all codes entered are accurate.
Insufficient Documentation
Insufficient documentation is another common issue, arising when the provided documentation fails to adequately support the billed services or when specific required elements are missing. It's crucial that all services billed are thoroughly documented; if documentation is lacking, insurers may assume that the services were not performed. Denials due to insufficient or missing documentation can be particularly challenging, as they often require provider involvement to rectify.
Proactive Approach to Coding and Legal Compliance
A proactive approach allows for early detection of potential issues, whereas a reactive approach may lead to unnecessary claim denials. It’s important to be aware of the legal implications of coding errors. Under 18 U.S.C. § 1347, knowingly defrauding a health benefits program is a felony, as is making fraudulent statements under 18 U.S.C. § 1035. Ensuring correct coding and adherence to billing protocols is essential to mitigate risk and avoid legal repercussions. Establishing strong protocols will help safeguard your practice in the event of an audit, as ignorance of the law is not a defence in cases of healthcare fraud.
6: Duplicate Billing
Duplicate billing often stems from human error but can also occur when claims are resubmitted instead of following up or cancelling a procedure without removing it from the patient's account. Claims processing systems typically have criteria to identify potential duplicates, categorizing them as exact or suspect.
Exact duplicate claims share identical information across several fields, including:
- HIC number
- Provider number
- Service date (From and Through)
- Type of service
- Procedure code
- Place of service
- Billed amount
To prevent duplicate billing, ensure proper service coding with the relevant condition codes or modifiers. This practice helps distinguish legitimate claims from duplicates, allowing for correct processing and timely reimbursement.
7: Upcoding or Unbundling
Upcoding or unbundling are two fraudulent practices that can lead to significant legal repercussions for healthcare providers.
Upcoding involves intentionally using a higher-paying code on a claim to secure greater reimbursement than what was provided. For instance, billing a covered Medicare service instead of a non-covered service constitutes upcoding, which is illegal and considered fraud.
Unbundling, also known as fragmentation, occurs when providers submit bills separately for components of a service that should be billed together. This practice aims to maximize reimbursement for tests or procedures, ultimately exceeding the bundled reimbursement rates set by payers. It’s essential to recognize that even adding modifiers does not legitimize unbundling; it remains illegal.
Medicare operates under a global surgery package, reimbursing surgeries based on a comprehensive care model. While unbundling to obtain additional payments may seem profitable, it violates legal guidelines. Understanding the appropriate use of modifiers and their role in coding is crucial to maintaining compliance and avoiding costly denials or legal action.
8: Further Documentation Requested to Support Medical Necessity
Payers, including Medicare, often require additional medical documentation to support the necessity of a claim before it can be processed. This may include various records such as the patient’s medical history, physical examination reports, physician consultation notes, discharge summaries, radiology reports, and operative reports.
Maintaining comprehensive documentation is essential; without it, claims may be denied because services were not performed.
According to Section 1862(a)(1)(A) of the Social Security Act, Medicare does not cover services deemed “not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.” Therefore, having proper documentation readily available is vital for successful claim adjudication.
9: Referral or Prior Authorization Required
Certain payers mandate prior authorization or a referral before specific services or procedures can be performed. It’s crucial to understand the distinction between these two terms:
- Referral: Issued by a primary care physician, this document allows the patient to see another healthcare provider for additional treatment or tests.
- Prior Authorization: This is a requirement from the payer to approve the performance of the necessary services.
While obtaining prior authorization is a critical step, it does not guarantee payment. To ensure successful claim processing, the submitted claim must meet three key criteria:
- Supported by Medical Necessity: The services performed must be deemed medically necessary.
- Filed Within Timely Filing Requirements: Claims must be submitted within the deadlines established by the payer.
- Filed by the Designated Provider: Claims must originate from the provider listed in the referral or authorization.
Adhering to these guidelines can result in claim denials, so understanding the process is essential for effective billing practices.
10: Services Not Covered / Coverage Terminated
Insurance coverage can change unexpectedly, making it essential to verify eligibility each time services are provided. Always confirm that the patient’s coverage has not been terminated, their maximum benefit for specific services (such as physical therapy or behavioral health) has not been exhausted, and that the services you plan to provide are covered by their insurance plan.
Understanding the patient’s coverage details is crucial. Some plans have caps on certain services, but if you follow the correct guidelines and provide appropriate documentation, these services may still be reimbursed. For instance, therapies like physical, speech, or occupational therapy can be covered when proper modifiers and documentation are used.
Why Choose BillingFreedom as Your Medical Billing Partner?
BillingFreedom stands out as the premier medical billing partner dedicated to optimizing revenue cycle management for healthcare providers. Our expert team ensures accurate coding and thorough documentation, significantly reducing claim denials related to coding errors or insufficient documentation.
Our insights guarantee 15-25% more revenue while enabling you to achieve 33% faster processing times. With 96% of our claims accepted and paid on the first submission, we significantly reduced A/R days and denials. We provide timely patient statement dispatch, ensuring visibility and transparency into every dollar earned. Our commitment to excellence is reflected in our 99% customer retention rate and our ability to resubmit denied claims in less than three days. Experience an average collection rate of 96% and a 15-25% increase in revenue.
Our comprehensive support allows providers to focus on patient care while we handle the complexities of medical billing, making BillingFreedom the trusted choice for seamless and efficient billing solutions.
For more details about our exceptional medical billing services, please don't hesitate to contact us via email at info@billingfreedom.com or call us at +1 (855) 415-3472. Your financial tranquillity is our priority!
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