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Knowing Why Claims Are Being Denied Will Help You Get Paid


Performing an audit on your denials will provide a clear picture of where you need to focus your attention in the billing process.

I spent some time this week reviewing denials that came through on some of our EOBs (explanation of benefits). Although this is a very laborious process, what I have learned from this exercise is truly worth the time I invested.

I ran a report in our software system that showed all of the EOBs that came in electronically. By opening up each file, I made a tallied list of the denial codes supplied by the insurance company. After a month's worth of data, I decided to drop everything into a spreadsheet and then sorted the data. It provided me a snapshot of where we are having billing issues and/or front-office issues.

Some of the problem areas that I found were:

• Claims were sent out with incomplete information

• Claims were sent out with incorrect or missing modifiers

• Charge codes were not covered under patients' plans

• Multiple duplicate claims were submitted - the insurance company may see this as a red flag and start auditing all of your accounts

• Precertification or authorization status was not included with claims - does this mean it was not obtained or not entered into the system?

• Insurance was terminated before patient was seen

• Patient name, date of birth, or policy number does not match; Patient cannot be identified as insured

• Claims submitted with incorrect provider name

• Patient's benefit maximum has been met

• Patient's insurance plan changed midway through treatment

• Primary EOB was not included with claim to secondary insurance

Now that I have identified where the denials are coming from, I can work with the results to improve our billing processes and procedures. I can group these denial types into areas of responsibility. For example:

Front-office staff. Provider name incorrect, incorrect patient demographics, precertification/authorization not present - all of these are front-office or data-entry problems and can be addressed with those employees.

Physicians. Coding and modifiers are the physicians' responsibility. Be sure they are fully trained or hold a modifiers and coding seminar to help educate them.

Office policy/manual. Patient benefit maximum met, insurance plan changed midway through treatment, patients plan terminated prior to visit. These are areas that need to be in your office policy stating that patients are fully responsible for the cost of their treatment.

Billing department. Claims sent out with incomplete information, duplicate claims, precertification/authorization not included with the claim; primary EOB not included with the claim to secondary insurance. These can all be addressed with your billing department. The only caveat would be that patients should also be responsible for coordinating their benefits.

Unless you ask the questions, you will never be able to fix the problems. Don't be afraid of what you'll find, instead understand that the results of your internal audit will help you solve multiple problems, and you can start getting paid faster and appropriately.

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