Top 5 Reasons Why Your Medical Claim Is Denied
Many claims are denied after a medical claims review. There are certain reasons why a medical claim is denied. That is what this article highlights.
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Patient advocates point out that an increasing number of medical claims are being denied by payers after a routine medical claims review. Valid claims denied range from essential services such as emergency room care and vital medical devices to treatments that some payers feel “lack medical necessity.” The Kaiser Family Foundation says that more than one-fourth of U.S. adults find it challenging to pay their medical bills. Emergency room claims are also being denied, according to the American College of Emergency Physicians. Patients whose ER visit doesn’t culminate in an emergency will have to pay the bill from their pocket. Patients are finding it difficult to get the vital services they need and even essential tests such as MRIs and ultrasounds require prior authorization, and this often delays the service. When a physician submits a claim to the payer for reimbursement, it may be denied for some valid reason. That is what we are examining here. •
Coding errors: Errors in assigning the right procedure codes to the medical services provided is one of the major reasons for claim denial. The attributes that are verified include allowable values, data integrity, format and required presence. An AMA study for the year 2013 showed that claims returned by the top 7 commercial insurers to practices for rework or error correction cost practices an average of $2.28 per claim, with 10.7% of all claims returned for rework. Since the study didn’t specifically address ICD codes, it could include both ICD and CPT codes.
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Non-covered charges: Insurers routinely deny claims for medical services that are not covered. While private payers are inconsistent regarding their coverage terms, Medicare is consistent. Medicare-covered services are those services considered medically necessary to the overall diagnosis or treatment of the patient’s condition, or to improve the functioning of a malformed body part.
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Duplicate claims: These types of claims are denied with error code CO18. Duplicate claim is one resubmitted for a single encounter on the same date, by the same provider, for the same beneficiary, for the same service or item. These are one of the major reasons for Medicare Part B claim denials, as much as 32% says the GAO (Government Accountability Office). CMS says that claims rejected as duplicates could be valid claims if the correct condition codes/modifiers are applied to demonstrate that the claim isn’t really a duplicate one.
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Overlapping claims: According to the CMS, an overlapping claim is one “when the date of service or billing period of one claim seems to conflict with the date on another claim, indicating that one of the claims may be incorrect. Examples of
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codes that may indicate an overlap include N347 (the claim cannot be paid because payment has already been made for the same service to another provider by a payment contractor representing the payer) and M86 (claim denied because payment already made for the same or similar service within the set time frame may be incorrect). •
Time limit expired: All payers have time limits on submission of claims. So, practices that hold smaller claims and batch processes them at a later period of time could face denials. For Medicare, all claims must be submitted within 12 months following the date of service. In this case exceptions include the following. o
When a beneficiary is eligible for retroactive Medicare entitlement: The filing limit will be extended through the last day of the sixth month following the month in which the beneficiary, provider, or supplier received notification regarding this entitlement.
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When there is an administrative error: The time limit will be extended through the last day of the sixth month following the month in which the beneficiary,
provider,
or
supplier
received
notice
that
an
error/misrepresentation was corrected. o
Retroactive Medicare entitlement that involves state Medicaid agencies: This is when a State Medicaid agency recoups payment from a provider or supplier 6 months or more after the date the service was furnished to a dually eligible beneficiary. In this case, the time limit will be extended through the last day of the sixth month following the month in which a state Medicaid agency recovered the Medicare payment from a provider or supplier.
Medical claim review companies know that providers must be well-acquainted with the market place coverage provisions of their individual states to be clear about what services are covered. Healthcare practitioners and their support staff must stay current on billing and coding trends. Double checking the claim before submitting it to the payer is mandatory. Another important thing is excellent coordination between the provider and the billing personnel. Finally, following up with the claim is very important. Maintaining communication with a representative working on your claim is advisable because they can warn you of any errors already found. Providers notified in this way can work on creating a new, error-free claim when the payer sends back the inaccurate claim.
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