Understanding Common Medical Coding Denials and How to Resolve Them
As a common issue in healthcare billing, medical coding denials can quickly escalate into an overwhelming problem without the right approach. Not only do you need to understand what denials are and why they must be avoided, you must have multiple solutions on hand to ensure accurate medical coding and maximized claim reimbursements.
What Are Medical Coding Denials?
Medical coding denials occur when your medical claim is received, processed, and deemed unpayable by your patient’s insurer. However, just because a claim is initially denied doesn’t mean you can’t receive reimbursement for it—you need to understand why you were denied, correct the errors, and resubmit it in a timely manner.
Why You Need to Avoid Denials
Claim denials can lead to considerable financial losses in your medical practice. In many cases, they cause delays or require that you process claims manually, both of which can be time-consuming and expensive. In addition, the longer a claim is left unpaid, the less likely you’ll receive maximum reimbursement on it—the claims cycle often has diminishing returns.
Because of this, you need to avoid denials whenever possible to improve your cash flow and revenue cycle management.
Top 10 Denial Codes in Medical Billing
Now that we’ve covered what medical coding denials are and why avoiding them is important, let’s dive into the most common reasons your claims may be denied.
Medical claims are often denied because they lack essential information regarding your patient or care services. The insurance company may deny the claim even if you leave a single field blank.
There are hundreds of codes used in medical billing to describe your care services, so mistakes are common. For example, ICD-10-CM codes are used to describe conditions and patient diagnoses, and CPT codes are used to describe medical, surgical, or diagnostic procedures. Both sets of codes require a high degree of specificity—using an incorrect, outdated, or nonspecific code can cause your claim to be denied.
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Services Not Covered By Payer
Often, these claim denials happen when staff doesn’t do their due diligence and confirm what an insurer covers your medical services or procedures.
Duplicate Claims or Services
Many insurers automatically flag and deny duplicate claims that include the same services, beneficiaries, providers, or service date.
Already Adjudicated Services
Many claim denials occur when a medical service is included in a claim that the insurance provider has already settled.
Expired Filing Limit
Insurance providers typically require healthcare providers to submit claims within a specific timeframe. Some require you to submit claims within 90 days, while others may allow up to a year for submission—it depends on the provider. However, filing a claim after this window closes often results in a claim being denied.
Transcription errors occur when crucial claim information, such as the patient’s name or the CPT code used, is transferred to the claim document incorrectly. It’s essential that your claims are as accurate as possible to avoid denials.
Billing the Wrong Company
Many medical coding denials occur simply because healthcare organizations submit claims to the wrong insurance company. It’s not uncommon for patients to change providers every few years, so this type of claim denial happens frequently.
Patient and Contractual Obligations
Patients and their healthcare providers typically have certain obligations to meet with their insurance companies. For example, claims are often denied because a patient’s deductible was not met or the claim submitted failed to support medical necessity.
Overlapping denials typically occur when one claim’s service period overlaps with another. These denials often occur when a patient is referred to multiple healthcare providers for care.
Medical Billing Denial Codes and Solutions
Here are a few strategies to avoid medical billing denials and actions you can take to prevent them from recurring down the road.
Code Things Right the First Time
Double-checking all codes, diagnoses, modifiers, and services to ensure they are accurate and compliant with the insurance provider’s policies.
Analyze Your Billing and Coding Process
To prevent frequent medical coding denials, you should analyze your processes to identify improvement areas. This can help prevent denials due to missing information or incorrect codes. For example, how many claims are denied because they were filed outside the required period? How many are denied because they contain the wrong CPT codes? Understanding the bottlenecks in your billing and coding process helps you run a more effective healthcare organization.
Train Your Employees
Medical billing professionals need to stay up-to-date on all relevant laws, regulations, and payer policies. By training your employees regularly, providers can ensure that they are well-versed in the latest rules and regulations for submitting claims. This helps you avoid delays, denials, and partial reimbursements and helps you maintain an exceptional revenue cycle management system.
Share the Workload With a Medical Billing Service Provider
If your in-house staff is constantly running into medical coding denials, consider enlisting the help of a medical billing service provider. By outsourcing your medical billing and coding needs, you can rest assured that all of your claims are submitted accurately and compliantly.