Historically, practices have focused on billing claims and kept their fingers crossed. This leads to delay in payments, increased bad debt, and additional expense. Practices today need to find an efficient way to manage denial volume and successfully appeal claims for adjudication. Top focus should be on denial prevention. The best way to do this is by utilizing an automated claims/scrubber rules engine at the time of charge entry.
Two primary reasons a claim doesn't result in a payment are as follows: Either the claim is not received by the payor, or the payor denies payment due to a defect in the claim, whether incomplete or incorrect demographic data, or lack of documentation supporting the services billed.
When a claim is denied, it is often far too costly and time consuming for a practice to do the necessary follow up and appeals to ultimately secure payment. In fact, 65% of denials are never even appealed.  The work has been done and a service provided but an administrative error dooms the provider to non-payment.
A medical claim is simply data – “I saw this patient (patient demographics), on this day (DOS encounter data), they have this problem (coding), I did this for them (coding) and they have this insurance (insurance data).” Get those five pieces of data right and you will get paid; get any of them wrong or miss any data elements and getting paid is a long, hard trek.
Sounds simple, right? It is conceptually. But actually getting all the data elements complete and accurate in a busy practice environment – in an area with the potential for frequent staff turnover – can be a challenge. Add to that the constantly changing requirements of your payor mix, state requirements, and changing reimbursement methods, and the process gets far more complicated. This is where a good claims editing system comes in, as a tool or set of tools that can be deployed to ensure process rigor and data integrity.
Here are some common data errors that can result in a denied claim and loss of payment:
- Assignment: “Accept assignment” box checked inappropriately
- Authorization: Claim form did not list the mandatory authorization number or referral form is missing
- Invalid CPT code
- Contract number: Subscriber’s contract number missing or invalid
- Dates: Missing or incorrect dates, such as admission and discharge dates, duplicate dates of service for same procedure code, or dates of first symptom
- Diagnosis: Diagnosis code missing or invalid
- Group number: Missing group number on claim form
- ID number: Physician’s national provider identification (NPI) number missing on claim form
- Insurance information: Subscriber’s name, gender, Social Security number, group, and/or plan number missing or invalid
- Modifiers: Missing modifiers on procedure that requires one
- Patient information: Patient’s gender missing or invalid, patient’s address invalid, birth date missing
- Place: Place of service incorrect or inconsistent with service provided
- Provider: Provider (physician) information missing or incorrect (for example, NPI)
- Referral: Referring physician’s name and/or NPI missing on claim form
- Service type: Type of service listed incorrectly on claim form
Smart claims editing enables your practice to apply pre-adjudication edits to the claims specific to your practice, payor mix, and state – giving you the chance to identify and correct the error before the claim is submitted.
Unfortunately, these tools are not available in traditional practice management systems (PMS). In fact, most PMS are “dumb” data input systems – accepting whatever data is put in regardless of whether it is accurate or even complete. This leads to dirty data and ultimately to lost cash as claims go out the door only to be denied payment. Faced with constantly changing regulatory guidelines, including ICD-10, a state-of-the-art claims editing tool ensures that your organization reduces claims denials while optimizing quick and accurate reimbursements. The payors all have automated systems that analyze claims to flag errors and trigger denials. Providers need the same set of tools to keep up and maintain reimbursement.
Savvy practices will look beyond their PMS vendor and bring in a revenue cycle management partner that offers state-of-the-art claims editing technology, as well as experienced billing experts, to help them improve clean claim rates and reduce denials. That is the type of purpose-built RCM system MDeverywhere has built from the ground up.
 “Insurance denials: Is your practice to blame?” MGMA In Practice Blog, Dec 2011, http://www.mgma.com/blog/insurance-denials-is-your-practice-to-blame