7 Reasons Your Medical Claims May Be Denied
RCMB, where our focus is on simplifying the complexities of medical billing and helping healthcare providers get paid on
time. We understand that denied medical claims can be frustrating and can disrupt your cash flow.
Our mission is to ensure you avoid these pitfalls, get faster payments, and maintain smooth operations. In this article, we’ll
discuss seven common reasons,
why medical claims get denied and how to prevent these issues from happening.
Pro vs. Cons
Dealing with medical claim denials is a reality for healthcare providers. Understanding the pros and cons of this process can
help you navigate the system more effectively.
Pros of Medical Claim Denials
While denials may seem like a hassle, they can actually help pinpoint areas in your billing process that need improvement. They
bring attention to errors in documentation or coding that can be corrected, ensuring smoother claims in the future.
Each claim denial provides insight into how internal processes can be streamlined. This might involve better training for staff,
updating systems, or improving communication with insurance companies.
Over time, these improvements can reduce the number of denials you face. Denials often happen because the provider doesn’t
fully understand the specific payer’s requirements.
The more familiar you become with these rules, the more successful your claims submissions will be.
Cons of Medical Claim Denials
The most obvious downside is that denied claims lead to delayed payments. This can impact the cash flow of a medical practice,
leaving providers waiting for the revenue they need to keep running.
When claims are denied, appealing the decision is a time-consuming process. It often requires gathering additional
documentation, communicating with the insurance company, and resubmitting the claim.
Each denial adds more work for your staff. Whether it’s identifying the cause of the denial, correcting the error, or resubmitting
the claim, it all adds to the administrative workload, which could otherwise be focused on more important tasks.
Denied claims can also negatively affect patient satisfaction. If a patient’s insurance doesn’t cover their treatment due to a claim
denial, it could lead to unexpected out-of-pocket expenses for them. This, in turn, can harm the relationship between the
provider and the patient.
Our Opinion
Here, we see denied claims as a preventable issue, and we believe that understanding the common reasons behind them can
help reduce their occurrence.
Here’s our take on seven reasons why medical claims get denied and some helpful prevention tips to avoid these problems in
the future.
1.Incorrect or Missing Patient Information
One of the most common reasons for claim denials is incorrect or missing information, such as the patient’s name, date of birth, or insurance details. Even a small typo can lead to a claim rejection.
Prevention Tip:
Double-check all patient information before submitting claims. Implement a verification process to ensure that all details are
correct and up to date. It’s also a good idea to cross-check this information with the patient’s insurance provider to avoid
discrepancies.
2.Coding Errors
Mistakes in medical coding, such as using outdated codes or incorrect diagnosis codes, are another leading cause of denials.
Payers rely on accurate codes to process claims, and any error can result in a rejection.
Prevention Tip:
Stay up to date with the latest coding guidelines and ensure that your coding team is properly trained. Invest in reliable medical
billing software that automatically flags potential coding errors before submitting a claim.
3.Lack of Medical Necessity
Insurance companies often deny claims if they determine that the treatment wasn’t medically necessary. This usually happens
when the documentation doesn’t provide sufficient evidence to support the need for the service or procedure.
Prevention Tip:
Ensure that medical documentation clearly outlines why the treatment is necessary. Work closely with healthcare providers to
make sure that the justification for each procedure is well-documented in the patient’s medical record.
4.Timely Filing Issues
Most insurance companies have strict deadlines for filing claims, and missing this deadline can result in an automatic denial.
Prevention Tip:
Be aware of each payer’s filing deadlines and implement a tracking system to ensure that claims are submitted on time. Setting
reminders for your billing team can help avoid late submissions.
5.Duplicate Claims
Submitting the same claim twice, either by accident or as part of an error in the billing process, can lead to a denial for
duplicity.
Prevention Tip:
Implement safeguards to prevent duplicate submissions. Use billing software that alerts you if a similar claim has already been submitted, and train staff to recognize when a duplicate might occur.
6.Authorization or Pre-Approval Missing
Many treatments require prior authorization or pre-approval from the insurance company. If this step is skipped, the claim will
likely be denied.
Prevention Tip:
Before providing services, confirm whether the treatment requires prior authorization. Keep detailed records of all
authorizations, including approval numbers and expiration dates, to ensure that all paperwork is in order before
submitting the claim.
7. Out-of-Network Provider
Sometimes claims are denied because the healthcare provider isn’t in the patient’s insurance network. This is especially
common with patients who don’t fully understand their insurance coverage.
Prevention Tip:
Before treating a patient, verify their insurance coverage and network status. This can be done during the scheduling process,
ensuring that the patient understands their benefits and potential out-of-pocket costs before receiving treatment.
Conclusion
Medical claim denials are an unfortunate but common challenge in healthcare, causing delays in payment and increasing the
administrative burden on providers.
However, understanding the common reasons for these denials can help healthcare providers avoid them and improve their
revenue cycle.
At Royal Center of Medical Billing, we are here to help healthcare providers navigate these challenges. By focusing on accurate
patient information, up-to-date coding, proper documentation, and timely submission,
we can help you reduce claim denials and keep your revenue cycle running smoothly. Whether it’s providing billing support,
handling denied claims, or offering prevention strategies,
we are committed to helping you avoid unnecessary delays and ensuring that you get paid on time.
Let us handle the complexities of medical billing so you can focus on what matters most, providing quality care to your
patients.