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Comparing Medical Billing Claim Denials and Claim Rejections

Comparing Medical Billing Claim Denials and Claim Rejections
To clear up any confusion, we’ll compare the terms medical billing claim denials vs. claim rejections.

There are two large obstacles that negatively impact healthcare reimbursements. These obstacles are insurance claim denials and rejections. Many people in the billing industry will try to use these terms interchangeably. However, rejections and denials have distinctions between them, and knowing these distinctions will help your revenue cycle. To clear up any confusion, we’ll compare the terms medical billing claim denials vs. claim rejections.

Claim Rejections

Claim rejections refer to claims that don’t satisfy the necessary data requirements and criteria, which insurance companies will ultimately reject. Insurance companies can’t process rejected medical claims. Since the data requirements aren’t satisfied, the medical claims never get put into the adjudication systems of the insurance companies.

You can resubmit medical claims after all of the errors have been fixed. Some errors are fairly easy to remedy. Sometimes, it’s as simple as correcting a digit on a patient’s insurance ID number.

Claim Denials

Denied medical claims are an entirely different problem altogether. Payers actually receive and process these medical claims. The claims are then denied whenever there is a negative determination. Unlike rejected claims, denied claims can’t be resubmitted so simply. The reason for the claim being denied has to be determined. Once that information is made clear, the right appeal can be written, or you may be able to request reconsideration.

Medical billing claims that get resubmitted without having either a reconsideration request or an appeal will probably get denied again. This means the claim stays unpaid, which can cost your medical practice additional funds and time.

Why Do Claims Get Denied?

There are five primary reasons medical billing claims tend to get denied. There can be missing information, such as missing modifiers, incorrect plan codes, or the lack of a patient identifier. It could be a duplicate claim for service. The service might have been adjudicated already. Sometimes, the payer doesn’t cover the services. Lastly, it’s possible that the limit for filing has already expired.

Improving Your Claim Rejections and Rate of Denials

Whether you’re doing your billing and coding in-house or with the help of a third-party company, you can take precautions to handle denials and rejections better. The first step is to train your billing staff so that they can address denials and rejections more swiftly. You’ll also need to have your management team monitor and observe trends in your payer rejections and denials. This will let you figure out how you can resolve issues effectively and swiftly.

It also helps to plan chart audits so you can observe the quality of your documentation and data prior to sending claims to your payers. In addition, work alongside payers to either edit or remove any contract requirements that will result in denials that will ultimately get overturned on appeal.

Lastly, make sure you’re using the right automated software. If you don’t have it, then outsource your medical billing so that you can improve your claim management and undergo predictive analysis.

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This entry was posted on Wednesday, January 13th, 2021 at 11:52 pm. Both comments and pings are currently closed.