Here’s Why Claims Processing in Healthcare Can Be Tough

What Happens When Claims are Denied

Unfortunately, claim denial is a very real problem in the healthcare industry. Denied claims are at an all-time high, and it’s making it more tough for patients to get the care they need and deserve. When claims are denied, it impacts the overall patient experience. It is equally challenging for physicians too. They provide the best and viable value-based treatment and care plan only to discover that patients cannot afford to pay their bill due to denied claims. 

By the time the decision for rejection is made, patients and providers are notified. They are given the full explanation of the appeals process which involves reviewing the claims after it was denied. They are not required to pay any amount while the appeal is ongoing.



The Top Reasons Why Claims Get Denied

From simple paperwork errors to more complicated issues, the challenge for claims processing in healthcare can run the gamut. You have to know all the possible causes in order for you to successfully appeal a denied claim. It can be a long, time-consuming process, however, knowing all of it might just save you the hassles and struggles of its complexities. Here are the top and the most common reasons why claims get denied:

Incorrect patient information

As simple as an incorrect name or birth date in the submitted form can be one of the root causes of a denied claim. In most cases, this can occur due to an accidental typographic error. If the provided information does not match with the file that the health plan has on them, the claim will be rejected. This minor inaccuracy brings about a considerable lag in an already complex procedure for everyone involved.

Insufficient health plan coverage

Exclusions are medical services that are not covered by the patient's health insurance plan. When patients are not eligible for a service, they are fully liable and are expected to take care of the payment. Most of the time, patients will be notified that their plan doesn't cover a certain surgery or session. Not only can a thorough understanding of plan coverage improve productivity, but it can also alleviate patient anxiety.

Missing or invalid CPT or HCPCS Codes

Up-to-date medical documentation is crucial to the revenue cycle when it comes to claims processing in healthcare. Healthcare Common Procedure Coding System (HCPCS) and Current Procedural Terminology (CPT) codes must be updated and followed with the current industry medical codes. By checking documentation before sending it to the payer, the revenue cycle can run smoothly and healthcare administration costs can be kept low.

Missing or invalid referral or pre-authorization 

Without pre-authorization when the insurers ask for it, you risk financial loss, as well as patient dissatisfaction. If you do have pre-authorization but it's invalid or its effective date has expired, the claims will still most likely be denied. Knowing which insurers require pre-approval is critical for claims processing in healthcare.

Late claims submission

Different insurers have varying dates but according to industry standards, initial claims must be submitted to payers within a 90 to 120-day time period. The claim will be rejected if the initial claim is not submitted before the filing date. In some circumstances, insurers agree to resolve the issue with a single phone call, but others may require to submit further documentation.

Claims Processing in Healthcare Can Be Complicated, But It Doesn’t Have to Be

Claims processing in healthcare is essential to the industry. It is one of the most important parts of running a healthcare business. However, the truth of the matter is that it’s often not done efficiently and accurately. Luckily, MedVision’s signature web-based claims administration platform QuickCap 7 (QC7) can help you improve the claims process by reducing errors, streamlining diverse workflows, and managing bulk claims in one go. 

Experience more convenient claims processing!

References:

1. Hewitt, Courtney. “5 Reasons Medical Claims Are Denied - Signature Performance.” Signature Performance. www.signatureperformance.com, June 17, 2020. https://www.signatureperformance.com/5-reasons-medical-claims-are-denied/.

2. Houseman, Kaitlyn. “5 Common Reasons for Claim Denials.” 5 Common Reasons for Claim Denials. www.revelemd.com, January 13, 2022. https://www.revelemd.com/5-common-reasons-for-claim-denials.

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