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Written by Madeline Hyden, MGMA Web content writer/editor

Better-performing medical groups have, on average, 4 percent claims-denial, according to the Performance and Practices of Successful Medical Groups, 2011 Report Based on 2010 Data. Involving your entire staff, not just those in charge of billing, in the claims process can make denial patterns more visible and easy to prevent. Review these common reasons for denial to improve cash flow and reduce write-offs in your practice:

Registration errors Denials often occur because of an error in the patient registration process; usually from outdated demographic or insurance information.

When a patient calls for an appointment, verify insurance coverage and benefits eligibility over the phone. If front office staff can't gather that information before the appointment, ask for it as soon as the patient arrives and obtain any necessary referrals or authorizations as soon as possible. After verifying eligibility and benefits, a waiver form may be needed so patients understand their financial responsibility if a claim isn't completely covered.

Billing staff should regularly communicate registration errors with the front-office staff, as well as provide reports containing denied claims patterns.

Diagnosis not coded to the highest level of specificity Your claim may be denied because your providers diagnosis needed to be more specific. Set up electronic prompts into your charge capture system that alert the user when there is a more detailed code available.

Patient's subscriber number is incorrect or missing This is caused by staff not entering complete registration information into your practice management system, or not confirming information with the patient. To prevent this denial, set up an alert or flag in your practice management system to ensure that information is filled out before the patient leaves the practice.

Claim is illegible If some of your payers still require you to submit claims on paper instead of electronically, you may have issues with claims being illegible.  

To prevent this denial, the Physician Billing Process urges you to make sure that the printer is lined up with the appropriate fields on the claim form. Most payers scan paper claims once they receive them, so make sure the text is dark enough and legible.

Changes to payers' organizations A payer may make changes to its system without alerting your practice. For example, a payer may need more detailed demographic information as of a certain date, but not communicate that to your practice. Categorize your billing by payer; if there's a payer-related issue it's easier to spot if it's consistent with multiple claims.

Now what? Appeal, appeal, appeal. While it may be tempting for your billing staff to write-off denied claims and never look at them again, there is potential for more reimbursement with each appeal.  Only 35 percent of providers appeal denied claims, so you're leaving money on the table if your billing staff doesn't start the appeal process as soon as you receive a denial.

To better prepare your practice for denials:

-Create a list of payers' appeal deadlines. Each payer may have a different timeframe for denial appeals, ranging from 45 days to a year. From there, organize denials by deadline.

-Develop an appeal letter template for the most common denial reasons. Where possible, use the specific wording from the payer's written and electronic publications.

-Consider appeals software tools. This software allows you to streamline denials and appeals, track the progress of a denial and create reports for denial prevention. Look for software that is compatible with your current practice management system.

For more information on maximizing your accounts receivable, read 4 A/R problems and how to fix them.

 


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