The Top Reasons for Claim Denials and How To Prevent Them

Denied medical claims are frustrating for all medical billers, whether they’ve been billing claims for 10 years or 10 months. Unfortunately, the potential for denied claims never really goes away, however, you can reduce the chance of seeing dirty, error filled claims many different ways. First and foremost, it’s important to understand why claims are denied so you don’t make those mistakes while billing. Pinpointing where claim issues start helps you identify where in your billing process you may be beginning your errors. With knowledge comes power, and while you may never eliminate errors for good, you can greatly reduce the amount you see in the long run. The following are the top reasons claims are denied, and what you can do to prevent them. 

Missing Information 

If a claim is missing information, it will almost definitely be denied every time. It doesn’t matter if it’s the smallest piece of information possible, the claim still can’t be processed if something is missing, because in the grand scheme of things, it could impact a lot. When you’re filing claims, make sure you’re filling it out in its entirety, and don’t be afraid to double check for missing information before you submit. It’s worth the few extra minutes to double check and avoid errors later. 

Incorrect Information 

One small typo can cost a lot of money. If a patient’s name is misspelled, the date of birth is entered incorrectly, or the billing code is incorrect, the claim will most likely be denied. A claim can’t be processed with the wrong information, because this could result in an inaccurate bill. The best thing to do is use a proper billing software that will automatically detect any claim errors before the claim is submitted. 

Patient Obligation

A denial based on patient obligation can occur for a few different reasons. Most of the time, this type of denial occurs because a patient’s insurance coverage wasn’t verified ahead of time. This is a common mistake, but one that can be seriously costly. The following are some of the reasons a claim may be denied due to patient obligation:

• The patient hasn’t met their deductible 

• The patient needed to seek a referral before their appointment 

• The service is not covered 

• The claim is missing necessary information to determine coverage

• Care is covered by a different insurer

Late Submission

Every insurance company is different, but they all have claim deadlines. When a provider works with a specific payer, they will be provided with any requirements that payer has, including claim formats, necessary information, and deadlines. These deadlines are usually fairly generous, so if providers submit late claims, there’s not a good chance that the claim will be accepted late. If a claim is denied because it wasn’t submitted in a timely fashion, it’s going to be very hard to appeal later on. Submitting claims before their deadlines is important to keeping the overall process running smoothly. 

Duplicate Billing 

A duplicate bill is one that is submitted on the same date for the same service with the exact same information on both bills. Duplicate claims are common, since many electronic billing systems automatically generate bills. However, a duplicate bill can’t be paid. Even though the duplicate is almost always a mistake, payers have no way of knowing what is correct and what is not, so the claim will be denied. 

Overlapping Claims

If a claim is denied because it’s considered an overlapping claim, this simply means that the service period for one claim overlapped with another. This often happens when a patient seeks care from multiple providers without asking for a second opinion referral. Providers may be able to fight these kinds of denials if they can provide a good reason for the situation. 

Service not Covered

Insurance payers specifically cover certain procedures and services. If the service received isn’t included in that insurer’s coverage or in the patient’s insurance plan, the claim will be denied. In some cases, the claim may be denied incorrectly, when the service really should be covered. This means providers should be able to fight the denial and receive their reimbursement as billed for. 

Incorrect Codes

Coding is complex and can often be documented incorrectly, resulting in a denied claim. Coding issues can come in many different forms, including anything from not including a code or including the wrong code to not following the standard of care associated with the included codes. 

Don’t Let Denials Slow Down Your Billing Operation

When you’re trying to run a reliable billing operation, you can’t let poor billing practices get in the way. If you’re still handling claims manually, it’s time to make a change. For Medicaid billers working out of New York, our NY Medicaid billing software is a great solution. If you’re interested, get in touch with our team today to book your free demo!