Payer Denials, Delays, and Managing Them at Your Practice

March 24, 2012
P.J. Cloud-Moulds

The difference between a denial and a delay, and how to effectively approach both.

The next time you gather your practice's mail, and pull out all of the EOBs and such from the insurance companies, try sorting them a little differently. Your usual stack of denials can be broken down by separating out simple delays versus solid denials.

What's the difference?

Denials: Can be described as missing or incorrect data, (including demographic information, insurance ID information, etc.) patient not eligible on the date of service, plan limit exceeded for coding, particular code used is not covered by plan, authorization not obtained, documentation does not support coding, etc.

Delays: Can be described as chart notes requested and not yet sent, coordination of benefits under review, claim requires further review, authorization or prescription not available, etc.

Delays can be taken care of immediately by obtaining the patients chart notes (EHRs make this very easy), prescriptions, or authorizations that have been obtained. Those items can be sent to your billing company or department immediately, and those claims can be appealed today and will be paid much quicker.

When managing your denials, it's very important to track where your denials are coming from, and the reasons why. What you are looking for are trends within the denials. You might actually be surprised to find out that a code you commonly use is not covered by a particular plan or insurance company. It's more common than you think. Is there a particular insurance class that sends back denials more often than others? Is one particular insurance company known for “dropping claims”? Does another nearly always ask for chart notes or a prescription? Are there some payers that claim a particular code is considered “experimental”?

Every one of these scenarios is a gem of opportunity! It provides you a chance to be proactive and provide all of the necessary information to your billing company at the moment you send over your charges. You can also identify those insurances that do not pay a particular code, stop using that code, find a comparable alternative and use that instead. This will immediately cut down your A/R, reduce resources to appeal, and you will be paid much quicker; all positive results of identifying trends.

Another area that can be examined, once identified, is human error. If you find this is a big area for denials, you may need to provide more training or be sure your data entry is being double-checked prior to sending out claims. It will cost you considerably less in upfront resources, than if there is a denial due to an incorrect date of birth or insurance ID number.

While reviewing your EOBs, insurance companies tend to use alpha-numeric codes as reasons for delay or denial. Sometimes, if it's your lucky day, they even provide a legend for those codes. If they do not, however, try going to their website and downloading a glossary of these reasons. For example, Palmetto has a great resource on their website.

This is a very different concept for those of you used to “chasing payments.” But just a few tweaks in your systems, can radically change your Inflow from delayed to paid!

Next week I will provide a comprehensive checklist for your front office staff at their next yearly review.

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