Claims Denial and Management

Claims Denial and Management

Claims Denial and Management

Ruth B. Garcis | November 19, 2018
Medical billing is an important factor in determining the financial success of a practice. The claims rejection rate has a serious effect on the cash flow of any practice. Claims denial is one that does not meet the set criteria of the insurance company. Claims that does not meet the HMO’s criteria will be denied. The health care provider will then refuse to pay. Clean Claim are claims that are processed successfully and are paid at first submission. Lightspeed have a 98% success claims rate from the first submission.
In medical practices, the claim rejection rate typically varies from 15-30% depending on the quality and capabilities of the billing team. A practice with a lower quality billing system, face a higher denial rate. A denied claim requires additional work and staff time. That cost approximately $20-$25 per claim, and its success rate for resubmission is from 55%-98%. If resubmission fails, the practice usually write-off the claim, which can cost 1-5% of net patient revenue. For Doctors in private practice, 15-30% rejection rate can have a detrimental impact on revenue.

Causes of Claim Rejection

According to the 2013 American Medical Association National Health Insurer Report Card: These are some of the reasons for claims rejection
1. Incorrect Coding: Use of an incorrect codes, is a key reason for claim rejection. Recent change from ICD-9 to ICD-10 codes, further complicates, the coding process , adding to these challenges.
2. Incorrect Patient Information: Incorrect DOB, wrong insurance ID, and/or incorrect or missing demographic information, are some other common errors that lead to claim denial.
3. Eligibility: Patients not eligible for certain treatment or has no insurance coverage.
4. Duplicate claim submission: Submitting the same claim twice, will allow the insurance company to reject the claim.
5. Wrong POS: Hospital, emergency room, office, or nursing home have a different 2 digit code that must match the CPT code used.


5 Tips to improve rejection rates
Everyone submitting bills and utilizing ICD-9 or ICD-10 codes, to Insurance companies, must pay attention to the details and review every bill before submission.

Here are some suggestions, to help you minimize the claim rejections.
1. Proof-Read Before Submission
When you are working to process claims on time, be sure to check your codes. If you miss a digit in an insurance ID or make a mistake while entering the number in the system, the your claim to be rejected. Remember to proof read every claim, to reduce such mistakes. Double check your work before you submit.
2. Information Collection From The Front Desk
Typically, the front desk is responsibility to collect and enter the patient information and insurance. Lightspeed communicates directly with the HMO’s/Insurance carriers. We began the patient chart with information directly from the insurance carrier. our system result in a 98% success rate from the first submission of the bill to the insurance company.
3. Eligibility Verification
Your billing software should verify patient eligibility within 30 seconds, at each visit so you have the correct insurance information to bill the claim.
4. Submit To Correct Insurance
Patients with multiple carriers, must submit the claim to the correct carrier. Submitting a claim to the wrong insurance often results in a speedy rejection.
5. Updated Insurance Requirements
Changing rules from HMO’s and ICD-10 codes can lead to multiple claim rejections. That’s why it’s important to keep a close eye on industry changes and update the information and procedures of your billing team. At Lightspeed, we update our system as changes occur. These changes are at no additional cost to the Practice.
These tips can help you minimize claim denials and improve collections, ( as low as 2%), but many practices lack the technology and experienced staff to effectively manage their medical billing, especially in light of constantly changing payer rules. Outsourcing your medical billing to experts like Lightspeed Revenue Cycle Management (RCM) is a great option. Lightspeed gives the Doctor complete transparency of billing activities 24/7.


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