What’s responsible for health insurance claim denials?

Aug 31, 2016 | Health Insurance Billing

A denied insurance claim can be incredibly inconvenient for you and your practice. About one in seven insurance claims is denied during healthcare claims processing, according to the Medical Billing Advocates of America. Luckily, the same group found that approximately half of the denials were overturned through appeals.

While that is reassuring news for health care providers, the appeals process can be lengthy and inconvenient for practice administrators. If you are forced to deal with a denial, it could lead to problems with the short-term budget for your practice. In order to avoid denials, it's important to know what is causing them. Here are five reasons an insurance claim may be denied:

1. Duplicate claims

"Rely on healthcare management systems to limit human error."

One of the most common reasons a claim is denied is because of administrative mistakes, according to Healthcare Finance News. The fact that these denials have nothing to do with medical conditions or policies should be concerning for administrators in your practice. A lot of the time, administrative errors occur when front-office employees accidentally resubmit a claim to an insurance company without providing ample time for a response. In other cases, a lack of internal software may be responsible for the shortcomings of practice employees. There should be a well-established protocol for submitting insurance claims and it should rely rather heavily on healthcare management systems to limit human error.

2. ICD-10 Issues
The ICD-10 is the 10th version of the International Classification of Diseases. It is extremely helpful to both health care providers and professionals in medical claims processing. Although the latest iteration of coding language gives doctors and providers more precision when it comes to cataloging treatments, there are still plenty of errors that occur as doctors continue to become more familiar with new guidelines, according to the American Health Information Management Association. 

One way to combat those issues is to invest in resources that will help get your staff acclimated to ICD-10. The best EHR platforms come with tools and other resources that help professionals find particular ailments so they are coded accurately. By doing so, doctors can utilize the new, detailed ICD system with more consistency.

3. Extra costs
A claim might be denied if a treatment or procedure requires additional costs. Take eye care, for example. Although an eye exam may be covered by an insurance policy, other costs associated with the diagnosis – like having to purchase new glasses or contacts – may not be. If you want an easy way to see what is covered and what is not, turn to real-time verification tools.

4. Cosmetic procedures
Some medical procedures aren't deemed necessary. Plastic surgery and cosmetic enhancements are generally not covered by insurance. That said, doctors can provide a complete EHR with annotated physician's notes as a helpful tool for fighting this sort of denial.

5. Time-sensitive reports
Often, insurance claims must be submitted by a certain date. Due to large administrative workloads, some claims may get lost in the shuffle. Make sure that your healthcare administration team is organized because these are perhaps the most avoidable types of denials.