coding & reimbursement
Reducing Claim Denials and Erroneous Payments
Attention to detail will help your practice obtain the payments it deserves.

Most practices experience ongoing problems with denied claims and claims paid in error. Here are some hints to reduce those denials.

Q. What is the most significant source of claim denials? Most claim denials are the result of not getting correct patient demographics. Make sure the patient's name is spelled exactly as it is on the insurance card. Copy or scan the card and keep it on file. Especially for Medicare, spaces matter. For example, "McDonald" is not the same name as "Mc Donald" on a Medicare claim. For private payers, you also need to check both the patients' and the subscribers' names.

Carefully train the employees who will enter the insurance information in the computer. Make sure they understand your unique contracts and that they select the most appropriate insurance company. Monitor their error rates so you can provide additional training.

Q. What can staff do to reduce claim denials? Reduce denials and the time you spend submitting appeals, as well as repaying overpayments, by double-checking claims each day before submitting them. Run a pre-billing report — a listing of all claim line items by patient, including codes, modifiers and diagnoses. This may seem like a hassle, but you will be surprised how many errors you can find and fix before submission. Cash flow will greatly improve and collections will also benefit with fewer denied claims to rework.

As you double check, look for the following:

► the diagnosis matches the CPT code

► the diagnosis is included in the local coverage determination (LCD). If the diagnosis is not on the LCD, check if the patient signed an advanced beneficiary notice (ABN). If there is one, ensure that the claim includes a GA modifier, which tells Medicare there is an ABN. If there is no ABN, use modifier GZ, which indicates that the claim may be denied because it may not be reasonable or necessary and that no ABN is on file.

► the ordering physician's name is on the claim for diagnostic tests

► office consults are properly documented with a request from the referring doctor, and the visit is not really a new patient or transfer-of-care. This area is currently of interest to Medicare and many private payers, especially the Blues.

If you find a potential problem in the pre-billing report, suspend the claim while checking the medical chart to verify that the documentation supports the claim. If it does not, you can make necessary changes with the physician's approval.

Q. How can staff keep order with so many forms of submission required? Use this list to establish time guidelines and keeps claim submission and payment flowing.

► data entry of charges: daily

► data entry of payments: daily

► electronic claim submission: daily

► paper claim submission for primary insurance: weekly

► claim submission for secondary insurance: weekly

► maximum time expected from date of service to claim submitted: 1 week

► maximum time expected from date of service to receipt of payment: 2 months.

Q. What else can we do? Establishing payer classifications can require additional data entry, but the benefit far outweighs the additional workload. Classification allows you to pinpoint developing accounts receivable problems. It also helps staff decide which insurance company to assign a patient.

However, don't over-classify your accounts, as this can be burdensome. A good breakdown is as follows:

► Private pay (cash)

► Commercial/PPO

► HMO

► Medicare

► Medicaid

► Workers' comp

► Other