Common mistakes that cause Claim Denials and How to appeal a denied Claim

Claim denials
September 12, 2012

Posted by MedbillingExperts / 0 Comment

According to the Department of Labor estimates, one in seven claims is denied. There are many reasons for denial of a claim. A good number of them could be avoided with proper care while others need one to be proactive.

Some of those that need paying attention to details could be:

  1. Non enrollment/ no coverage: When a patient is not enrolled or if a particular procedure is not covered, the claim could be denied.
  2. Lack of referral: Some claims require a referral and in the absence of a valid one there could be a denial. Some insurance companies mandate that Outpatient surgery centers receive approval before providing any medical services. They could deny claims that don’t have a pre-certification on file. If they think that medical procedure is not required they can deny claims. If proper supporting documents are not submitted there is a high possibility of a denial.
  3. Illegible entries: Some denials could be because entries are illegible. Not all payers accept electronic claims. When the claims are printed illegibly, they get denied while they get scanned.
  4. Omission of crucial information: When certain crucial information has been omitted, for instance, the date of the emergency or the date of the accident, the claim is likely to get denied. Leave no stone unturned in confirming that all required information has been filled.
  5. Incorrect information: There could be a denial due to the entry of incorrect patient demographic information.
  6. Late filing: Another important reason for denial is when the claim is not filed on time.

Now that we have seen some of the reasons why a claim could be denied, we must also remember that a claim denial is not the last word and taking the following measures will make it possible for the claim to be accepted consequent to a denial:

  • Have a process in place to ensure that every denied claim is inspected to check for correctness. And by all means, appeal. A significant number of denied claims go without being appealed. It would not harm to call the insurance carrier to find out the reason for denial. It is advisable that you make a note of the name of the insurance representative and the reference number.
  • It would be a good idea to follow up on each denied claim at least once a month to get the status on denied claims. Assign this task to a person who is knowledgeable and is in an authoritative position to handle this effectively.
  • An automated system for obtaining, tracking and monitoring data could save time and reduce error.
  • One of the most effective ways of appealing a denied claim is to write a letter to the insurance carrier. This letter should contain all the necessary information like the patient name, claim number, date of service, member ID, provider number etc. Ensure that all the supporting documents go with this letter.
  • When everything else fails, a formal complaint can be filed to your state insurance commissioner against your health insurance provider.

Since interaction between providers and insurers involve huge costs, effective Denial Management is one area that providers can focus on improving constantly. It would ultimately ensure the best possible reimbursement is provided for the services.

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