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The Most Common Reasons for Payer Denial of Claims

Ophthalmology Management October 1, 2004

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The Most Common Reasons for Payer Denial of Claims

Ophthalmology Management asked MedSynergies, a leading provider of financial and technology services to physician practices and medical clinics, to conduct a review to determine the main reasons for denied claims at a typical ophthalmic surgery group.

After looking at almost 39,000 denials received by one group over a 12-month period, MedSynergies found that four main issues accounted for more than 98% of overall denied claims. Because one issue, "verification of patient benefits," accounted for more than two-thirds of all denials, the firm conducted an additional analysis of that one issue.

The findings from both reviews are below.

 

 
Reason for Denial % of Denied Claims
Verification of patient's insurance benefits* 67%
Insurance contractual issues with payer  19%
Additional claim information needed 9%
Incorrect or missing coding 3%
Other 2%
*Verification of Benefits Issues
Co-insurance issue (patient payment) 63.1%
Insurance terminated prior to date of service 9.6%
Claim is patient's responsibility (deductible) 3.3%
Claim denied or covered by another payer 1.4%
Secondary insurance doesn't cover charges denied by Medicare 1.1%
Medicare can't identify patient 0.9%
No coverage under subscriber number 0.8%
Must bill primary insurance first 0.7%
Miscellaneous other issues 19.0%

Commenting on the survey results, John R. Thomas, president and CEO of MedSynergies, noted that "the profile of denied claims for this ophthalmology group actually looks quite similar to those of medical groups in general. Ophthalmic surgery practices tend to have much higher dollar-value claims, but insurance eligibility issues are still the primary reason for denials across the board, in almost all groups."

Thomas suggests that insurance eligibility issues can be largely corrected by moving from a paper-based system to a newer, integrated practice management system that integrates back-end billing functions with scheduling, eligibility and charge capture.

About the data: The MedSynergies review looked at a sample of 38,862 first-pass denials received by a typical, medium-sized ophthalmology surgery group from various payers (Medicare and private insurance) during the course of 12 months ending May 1, 2004. The medical group filed its claims using an automated financial management system. To preserve privacy, the data was collected on a "blind," aggregated basis.

 

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