How much are rejected claims affecting your practice or hospital? If you're like the average, 1 in 7 of your claims are rejected. Many healthcare providers share this frustration and want to know how to reduce claim errors in their organizations.
It's costly, time-consuming, and impacts patient care. But, with the right approach, a smoother process is within reach.
This blog offers practical advice for reducing claim rejection, focusing on effective strategies for healthcare providers. Improving claims management (and reducing revenue leakage), timely filing deadlines, and value-based care is a worthy endeavor.
The High Cost of Errors
The financial impact of billing errors is staggering. Around 80% of all US medical bills contain errors, leading to wasted resources and lost revenue.
Delayed payments also impact a healthcare practice's financial stability. A 70% error margin demonstrates the extent of this pervasive issue.
Roughly 10% of claims face rejection from non-compliance issues alone. Reworking rejections costs about $118 per claim.
Common Culprits: Pinpointing the Most Common Problems
Several recurring errors plague the claims management process. Addressing these problems can significantly improve the accuracy of claims and enhance revenue cycle management.
1. Inaccurate Patient Information
Cause: Errors in recording patient details such as name, date of birth, or insurance ID can lead to claim denials. Even minor discrepancies can cause issues.
Editor's Note: Many of the errors that occur during registration or eligibility verification are due to data entry mistakes. Many companies in the healthcare industry like Nuance are turning to Magical to help with these errors.
Magical is an automation and productivity tool that eliminates repetitive typing tasks like patient registration and transferring patient data between systems. You can set up automations with Magical to autofill forms, thereby reducing errors.
2. Incorrect Coding
Cause: Using wrong medical codes (CPT, HCPCS, or ICD) or entering incorrect details for the place of service can result in claim rejections. This includes using too many or too few digits in codes.
3. Missing or Incomplete Documentation
Cause: Failing to provide necessary documentation or leaving out essential information can lead to claim denials. Proper documentation is crucial for claim approval.
It's also essential to check the patient's insurance coverage before services are rendered. Confirming eligibility and prior authorization streamlines the process.
4. Duplicate Billing
Cause: Submitting the same claim multiple times, whether due to system errors or manual mistakes, can result in denials and delays. About 30% of errors are due to duplicate billing.
5. Lack of Prior Authorization
Cause: Not obtaining required pre-approvals for certain procedures or services can lead to claim denials. Ensuring prior authorization is obtained when necessary is essential.
6. Failure to Verify Insurance Coverage
Cause: Not confirming a patient's insurance eligibility and coverage details before providing services can result in claim rejections. Regular verification is necessary to prevent such issues.
7. Timely Filing Issues
Cause: Submitting claims after the payer's deadline can lead to automatic denials. Adhering to timely filing requirements is crucial for claim acceptance.
9 Effective Strategies to Reduce Insurance Claim Errors in Healthcare
Implementing effective strategies is essential to minimize insurance claim errors in healthcare. By adopting the following approaches, healthcare providers can enhance the accuracy of claims and improve overall revenue cycle management:
1. Implement Comprehensive Staff Training
Benefit: Well-trained staff are proficient in accurate coding, documentation, and claim submission processes, leading to fewer errors and reduced claim denials. Regular training ensures that employees stay updated on the latest billing codes and insurance policies, enhancing the precision of claims (more on staff training later).
2. Use Advanced Claims Management Software
Benefit: Employing sophisticated software automates the claims process, reducing manual errors and streamlining workflows. Automation facilitates quicker claim submissions and provides real-time tracking, improving efficiency and accuracy.
3. Conduct Regular Audits and Monitoring
Benefit: Routine audits help identify and rectify recurring errors, ensuring continuous improvement in the claims process. Monitoring claims allows for detecting patterns that may lead to denials, enabling proactive measures to address issues.
4. Maintain Clear Communication with Payers
Benefit: Establishing strong relationships with insurance companies ensures clarity on policies and procedures, reducing misunderstandings that can lead to claim errors. Effective communication facilitates prompt resolution of issues and keeps providers informed about changes in payer requirements.
5. Implement a Robust Denial Management Process
Benefit: A structured approach to managing denied claims enables quick identification and correction of errors, leading to successful resubmissions and improved cash flow. Efficient denial management minimizes revenue loss and enhances the financial health of the practice.
6. Verify Patient Insurance Information Before Services
Benefit: Confirming insurance details before providing services ensures that claims are submitted with accurate information, reducing the likelihood of denials due to eligibility issues. This proactive step enhances patient satisfaction by preventing unexpected billing problems.
7. Stay Updated on Regulatory Changes
Benefit: Keeping you and your team informed of changes in healthcare regulations and payer policies ensures compliance and reduces the risk of claim rejections due to outdated practices. Staying informed allows for timely adjustments to billing procedures, maintaining the integrity of the claims process.
8. Perform Regular Claims Scrubbing
Benefit: Getting coding right the first time is more cost-effective, as reworking denied claims costs valuable time and money. Claims scrubbing software flags potential coding errors and ensures accurate services are billed.
9. File Your Claims ASAP
Benefit: Timely filing is crucial. This prevents late submission rejections. Keeping up-to-date on coding guidelines and payer rules prevents denials and improves reimbursement.
Investing in Your Team With Staff Training and Education
Your team is essential to reduce insurance claim errors. Training in best coding practices and documentation, staying updated on industry standards, and investing in continuing education resources is vital. Here are some specific training programs and courses to consider:
1. Certified Professional Coder (CPC®) by AAPC
The CPC® certification validates proficiency in medical coding, including the correct application of CPT®, HCPCS Level II, and ICD-10-CM codes. This certification is ideal for staff involved in coding and billing processes.
2. Certified Medical Insurance Specialist (CMIS) by Practice Management Institute
The CMIS program focuses on managing third-party provider reimbursement, including working with managed care plans and third-party payers. It's designed for staff responsible for insurance verification and claims processing.
3. Medical Billing and Coding Fundamentals Specialization by MedCerts
Offered through Coursera, this specialization provides a comprehensive understanding of medical billing and coding, including insurance terminology and revenue cycles. It's suitable for those new to the field or seeking to enhance their skills.
4. Patient Access Education by HealthStream
This program equips staff with the knowledge to competently verify, discuss, and explain insurance details and payment options to patients. It's beneficial for front-end staff involved in patient registration and insurance verification.
5. Medicare Learning Network® (MLN) by CMS
MLN offers a variety of training materials and resources on Medicare-related topics, including billing, coding, and compliance. It's a valuable resource for staying updated on regulatory changes and best practices.
Final Thoughts
When you know how to reduce insurance claim errors in healthcare, you know it's a worthwhile pursuit if you care about boosting your revenue (who isn't, right?). Staying persistent and following these guidelines improves revenue cycle management and minimizes the administrative burden.
Focus on accurate patient data, proper medical coding, and timely filing. This helps with primary care and other healthcare provider claims processing. Well-trained staff increases efficiency and satisfaction.
Effective strategies benefit both staff and patients, contributing to a more efficient and less stressful healthcare environment.
If you're part of a healthcare admin team and want to know how to manage patient data and other administrative tasks more efficiently, try Magical. Magical is used at more than 50,000 companies like Dignity Health, United Healthcare, and Optum to save 7 hours a week on their repetitive tasks.
