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Why Are Claims Denied?

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Why Are Claims Denied?
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Why Are Claims Denied?
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Three reasons are at the root of most denials.

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The reasons an insurer might deny a medical claim are numerous. The majority of denied claims, however, are the result of easy-to-correct errors or omissions. Incorrect patient demographics seem to top the list.

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Health Information

Three reasons are at the root of most denials

By Rebecca Mayer Knutsen

The reasons an insurer might deny a medical claim are numerous. The majority of denied claims, however, are the result of easy-to-correct errors or omissions. Incorrect patient demographics seem to top the list. Experts recommend that health information professionals have systems in place to avoid these costly errors before they happen. Here are three of the most common reasons medical claims are denied:

1. Incorrect or Incomplete Patient Demographics. When a patient fills out pages and pages of paperwork at the beginning of a doctor's appointment, mistakes are bound to happen. Anything from the patient's name to street address might be spelled incorrectly or be illegible. Often patients don't know their Social Security number, so they record what they think it is ... or maybe someone jotted down her husband's birth year instead of her own. These are all honest errors, but the medical practice may wind up paying the price.

"Submitting incorrect information to insurance companies will hurt your practice tremendously," explained Alicia Henderson, president and owner of Henderson Medical Billing Solutions in Murrieta, Calif. "We have found that when a patient's information is missing, it delays the process of getting paid by several months."

These costly practice errors can be avoided by reviewing the information a patient submits while he is present in the office. Additionally, staff members who enter the data into the practice's EHR should review their work to be sure that the data entered is accurate.

Why Are Claims Denied?2. Coverage Is Terminated and/or the Service Isn't Covered. Occasionally, a medical practice may find that they have billed an insurance company that is not currently insuring the patient in question. This can happen for a variety of reasons: The patient was recently laid off and didn't realize the plan was terminated as a result, or maybe she switched to a new plan, or even a new insurance company, without notifying the office.

Patients should verbally verify their insurance coverage and/or present an insurance card at the start of each appointment. Practices can avoid billing the wrong insurance company by verifying a patient's benefits before rendering services.

3. Issues with Referrals/Prior Authorization. Insurance payers often require prior authorization and/or referrals for expensive or specialized procedures and for outpatient services such as physical and occupational therapy. A claim submitted without the required prior authorization will more than likely be denied, with the exception of medical emergencies.

Some insurers will allow the provider to request a retroactive authorization a day or two after the services are rendered. The best strategy, however, is to contact a patient's insurer to confirm her coverage before providing services.

"When you or your staff verifies your patient's insurance benefits, it's important to ask whether or not the patient's plan requires you to obtain a referral or authorization," Henderson shared. "We have seen many payments delayed due to missing pre-authorizations and referrals."

To take it one step further, keep a call log of every call you place to the insurance companies to verify patient information, including a clear account of who you spoke with and when, what information they provided and finally, obtain an authorization code.

Rebecca Mayer Knutsen is a former staff writer at ADVANCE.

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Comments

Great Reference Sarfaraz
Fatima Afari
April 17, 2016

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