A medical billing denial is a term that best describes the rejection from an insurance company for a request catered by an individual to pay his healthcare expenses. Here in this blog, we will share reasons behind medical billing denials and some exciting tips to prevent them in the future.
- A medical billing denial is a term that best describes the rejection from an insurance company for a request catered by an individual to pay his healthcare expenses.
- There are two basic types of claim denials; hard denials and soft denials.
- The compassionate experience a patient gains from its healthcare staff will eventually increase the patient engagement to enormous levels.
- Hard denials are the ones that cannot be rectified or changed, whereas soft denials are the ones that are temporarily denied and can be corrected later.
- A billing claim may get rejected due to incomplete or missing information.
- Health insurance companies do not cover some specific procedures or services.
- By quantifying, measuring, and tracking denials, you can categorize them easily.
- It is essential to track the progress of billing denials.
- Using automated predictive analytics software, you can easily detect the potential denials and examine the issues beforehand.
What is Medical Billing Denial?
A medical billing denial is a term that best describes the rejection from an insurance company for a request catered by an individual to pay his healthcare expenses. There’s a difference between a medical billing claim that gets rejected and a bill that gets denied. The difference makes serious errors and badly influence revenue management cycles.
Now coming to the point, a medical claim rejection is a request that can not be processed due to basic formatting issues or unavailable data requirements. It is thought that these medical bills are rejected by the insurance companies, but in actual they are not received by them.
In contrast, medical billing denials are requests that are received but not actually processed by the insurance companies, although the expenses have been paid. There is no resubmission for denied claims. The cause behind such types of requests needs to be reevaluated to determine the actual reason behind claim denial.
Types of Billing Denials
There are two basic types of claim denials:
- Hard Denials – Hard denials are the ones that can not be rectified or changed and are thus irreversible. Such claim denials get lost, or written-off revenue and are of no use to the insurance companies.
- Soft Denials – Soft denials are the ones that are temporarily denied and can be rectified or corrected once the necessary information is available.
Reasons Behind Medical Billing Denials
According to the American Medical Association National Health Insurer Report Card (2013), the five most common reasons associated with medical billing denials are:
1. Incomplete or Missing Information – Most often, a billing claim gets rejected due to incomplete or missing information. There could be technical errors associated with it that may act as a missing modifier. It is one of the significant reasons behind initial medical billing denials.
2. Duplication of the Claims – At times, the medical claim gets duplicated on a single encounter for the same date by the same healthcare provider. It could be another reason that becomes a significant reason behind medical billing denial.
3. Uncovered Payments – Some specific procedures and treatments are not covered by health insurance companies. Such billing denials can be avoided by evaluating the insurance eligibility of a certain procedure.
4. Adjudicated Services – Certain services are part of the medical allowance but such errors occur due to a misunderstanding for another procedure or as a result of an adjudicated service.
5. Expired Limit for Filing – Another leading cause behind medical billing denial could be the expiration of medical claim submission. Such errors can be prevented by meeting time limits.
Tips to Prevent Medical Billing Denials
By increasing your team members, you can not ensure to reduce the number of claim denials. With some of the following preventive measures, you can devise a strong management plant to prevent denials effectively.
1. Measuring & Tracking Denials
Another leading cause behind medical billing denial could be the expiration of medical claim submission. Such errors can be prevented by meeting time limits.
2. To Track the Progress of Billing Denials
It is essential to track the progress of billing denials as they help you determine and implement the resources that can be considered an effective solution to encounter them.
3. By Improving the Quality of the Patient’s Data at Registration Time
The patient’s data quality is an essential factor that reduces the number of medical billing denials.
4. By Researching the True Reasons Behind Billing Denials
You can avoid wrong or incorrect assumptions by determining the actual or underlying reasons behind claim denials. It can be done through the implementation of a focused and robust research strategy.
5. Developing a Preventive Approach Throughout the Revenue Cycle
You can reduce the rates of medical billing denials to sharp levels by developing a preventive approach throughout the revenue cycle with a clear mindset.
6. By Optimization of your Claim Management Software
An optimized claim management software can do wonders for your billing company by ensuring your claim rates’ cleanliness. It will automatically review the functioning and accuracy of your claims. Make sure that your client provides clean claims to improve the overall utility of medical billing claims.
7. Use of Automated Predictive Analytics Software
Using automated predictive analytics software, you can easily detect the potential denials and examine the issues beforehand. Often medical practices do not have a strong technical background and a team of efficient healthcare claim professionals to manage billing denials. You can effectively outsource your revenue cycle management with our team of experts at Millenium Medical Billing.
Avail of our effective and reliable denial management services by consulting with our team of healthcare claim experts.
Talk to us! We also offer online consultations for your practice.