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Why Many Medical Claims Are Rejected on First Submission

Why Many Medical Claims Are Rejected on First Submission

Rejected medical claims cost you time and money. However, medical claims processing doesn’t need to be so difficult.

Getting a medical claim approved on first submission will make life easier for everybody.

Most insurance companies know that if they deny a claim right away, the odds are that they will never have to pay it. These are for-profit businesses, after all.

So how do you make sure all of your I’s are dotted and your T’s crossed so that the insurance company can’t reject your claims?

In this article, we’ll explore why medical claims are typically rejected on first submission and what you can do to avoid this unnecessary headache.

1. Transcript Errors That Need to Be Corrected

Most medical claims are initially rejected because they have easily avoidable errors.

For instance, if a patient’s birth date is December 21, 1975, and it’s submitted as December 21, 1976, the claim will be instantly rejected.

Attention to detail is key in medical claims processing because any minor error can void the claim.

If you’re wondering why a claim has been rejected when everything you’ve submitted seems to be in line, the first thing to do is check for errors or typos.

Something as simple as spelling the name Jane Johnsen instead of Jan Johnson can be a stop-gap that will keep a claim from being approved.

2. The Claim Was Filed with a Provider That is Not in Network

This is one of the most common reasons that medical claims get denied.

Many employer’s health coverage providers are HMO’s (Health Maintenance Organizations) and require a patient to stay within the network to be covered.

When a patient goes outside of the network, they are working with providers that haven’t agreed to the payment terms the insurance company has laid out. These claims will be denied.

In addition to this, non-emergency care or care that is not deemed as necessary from a medical perspective can be denied or paid out at a lower than expected rate.

In these cases, the patient will be expected to cover the entirety of the bill or pay a larger amount than expected.

Make sure your patients stick to providers that are within their HMO’s network and only have procedures done that are deemed necessary by doctors. Otherwise, their medical claims will be denied.

3. Medical Claims Charges Aren’t Covered by the Policy

There’s no doubt that insurance coverage is a complicated subject. If medical claims were rejected, there is a good chance that they were not covered by the insurance policy to begin with.

This can be very frustrating because none of us enjoy pouring through page after page of insurance jargon. However, before a treatment or procedure is performed, patients always need to verify if it is covered by their policy.

This avoids unpleasant and expensive surprises down the road.

Explain it to a patient like this: is it better to know now that a procedure won’t be covered so you can financially plan for it? Or is it better to be slapped with a huge and unexpected bill months after the procedure is complete?

The answer is evident.

Teach patients to spend some time pouring through their policy so they know what is and isn’t covered.

If they have questions about any specifics, call the insurance company and get the answers they need.

4. Was the Medical Claim Filed in a Timely Matter?

Delaying on filing medical claims will get them rejected more times than not.

Insurance companies expect that a claim will be filed in a reasonable time frame from when care was provided. If the claim isn’t filed within the benefit year, it will be denied.

The best policy is to file all medical claims as soon as humanly possible after treatment. This will avoid potential headaches down the road.

5. There Was No Referral or Pre-Authorization

In many cases, insurance companies will not cover medical claims that are done without a referral or pre-authorization from a doctor.

Especially in cases involving MRI’s or CT scans, a doctor needs to request or refer these. If they do not, the medical claim could be denied.

If you’ve received a denial for a procedure and are unclear why, find out if the doctor properly referred it. If it wasn’t, their office should be able to clear up the error.

6. Billing Error: The Medical Claims Went to the Wrong Insurance Company

This may sound ridiculous, but it happens quite often.

With millions upon millions of medical claims being processed every year, it’s easy for a claim to get directed into the wrong insurance company’s hands.

A common reason this happens is when a patient hasn’t seen a particular doctor for a long period of time. Often, the doctor will have out-dated information on file and will use that information for filing medical claims.

This is a sure-fire way for a medical claim to get denied.

Fortunately, you can streamline medical claims billing to avoid these common errors from happening.

7. Duplicate Coverage 

Expanding upon point number 6 is a scenario where a patient has duplicate coverage.

Some patients have coverage through their own employer as well as their spouse’s employer.

In this situation, it is common that medical claims get presented to the wrong insurance company and end up denied.

Duplicate coverage can be a great thing to help cover gaps in policy coverage. However, it can cause confusion in medical claims processing.

Make sure all claims are going to the right provider based upon the care provided. Missing this detail will get claims rejected on first submission every time.


Even if a medical claim is rejected on the first submission, it doesn’t mean that it’s time to give up.

Hospitals, doctors and health insurance companies can help reverse the rejection.

Stay on top of all medical claims from beginning to end. It is the insurance company’s job to pay out all claims that are within their contracted agreements.

If the claim is rejected on first submission, review these seven reasons why this may have happened. Then take action immediately.

To file medical claims faster and more effectively, and to focus more on patient care and less on insurance claims processing, join the thousands of providers across America using Apex EDI.



Posted in: Medical Claims

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Why You Need to Secure Your Claims Processing

Why You Need to Secure Your Claims Processing

Health insurance has been a highly debated topic over the past few years. With the Affordable Care Act, we have more insured Americans than ever before. 

With more people using various forms of health insurance, we also have more insurance claims to file. This often means that medical associations and individual practitioners are getting slammed with more and more paperwork. Medical billing can be overwhelming.

Medical claims processing can be a stressful ordeal, so let us help you figure out what you need to know.

How medical claims processing works

We live in a world where technology is expanding at unbelievable rates. With this massive growth, the way we do things is constantly changing. What was commonplace even a few years ago may be obsolete now.

The medical field is no different. While we all know that medical procedures have changed drastically over the past decade, many people don’t consider how much the work behind the scenes has changed.

Whether you have been in the field for years or are just starting, we’ll show you what you need to know.

The old way

Let’s start by looking at the traditional process of medical claims processing. We’ll paint the picture. 

It’s a Tuesday morning and you’re still working on claims from last week. You have a pile of files on your desk. They are medical claims that need to be filed with several insurance companies.

They are sorted into distinct piles based on where they should be submitted. It’s a lot to keep track of. You diligently fill out the forms. After a few hours, you can feel that familiar tension building between your eyebrows.

Now that you’ve started to make a dent in your first pile, it’s time to start correcting the older, rejected claims.

The first few go quickly. Silly mistakes, typos, and an incorrectly spelt name. You can’t believe you missed these the first time, but at least they’re easy to fix.

Suddenly, you get stuck on one. You can’t see anything wrong with the form and you’re not sure why they denied it.

You glance at your phone, then decide to set the file aside so you can deal with it later. You have too much to do to spend a half-hour on the phone with an insurance company right now.

By the end of the day, you’re even more behind than you were this morning. Then you see that file next to you. You forgot about it. So you call the insurance company.

20 minutes later, you still aren’t sure what went wrong, so you put down the phone.

If this sounds familiar, rest assured that there is an easier way. 

The new way

Now imagine it’s Friday and you aren’t behind at all. You started using a clearinghouse for your medical claims processing. The process seemed so different at first, but you’ve gotten used to it and now it feels like second nature.

You simply log into the clearinghouse and upload your files. After a few minutes, you notice that several were flagged, so you quickly go in and correct the problems. 

Then, the forms are sent to the insurance companies, so you don’t have to think about it much. 

In fact, you’re already getting reimbursed for claims filed a week ago!

You can do more claims quickly and you know that it’s secure and HIPPA compliant. You finally feel at ease.

Benefits of using a clearinghouse

The new way of medical claims processing simplified life for those of us who do regular billing.

Whether you’re an individual with a private practice or the head of a medical claims processing department that bills for many healthcare processionals, a clearinghouse can help you.

But a more enjoyable workday isn’t the only benefit of a clearinghouse. In fact, we have a list of ways this service can help you!

Fewer problems

Using a clearinghouse for your billing can drastically reduce the number of errors in your claims. In fact, the average error rate for claims submitted electronically through a clearinghouse is 25% lower than those submitted by paper.

Make changes quickly

When you do have an error that the clearinghouse catches, you can correct it quickly. Before it is submitted to the insurance company. This means that you are fixing the problem in a matter of minutes, rather than weeks.

An extra set of eyes

Since the clearinghouse catches so many little mistakes, you can trust that you’ll have fewer claims denied. It’s nice to have someone looking out for you! 

Batches of claims

Since clearinghouses do medical claims processing for a number of insurance companies, you don’t have to sort them on your own like you did when you submitted claims to each company separately. Instead, you can simply upload all of your claims at once.

Fewer headaches

For those moments when you do have trouble with something, you can be assured that you’ll have someone (other than the insurance company) to call for help. The customer services that goes along with a clearinghouse means you won’t have to figure out everything on your own.

Accurate picture of finances

Because the clearinghouse streamlines the process of medical claims processing, everything moves faster. Instead of waiting weeks or even months for an insurance company to reimburse you, you may only have a wait a few days. With less to keep track of, you’ll know where you stand financially on a more immediate basis.


You know that the clearinghouse uses HIPPA compliant procedure, so you don’t have to worry as much about potential violations.

Save money

Another important benefit of a medical claims processing service is the fact that it will save you money. Because of the streamlined process, fewer steps means you won’t need to spend as much time billing insurance companies.

With less time, you need as many people working on billing. A smaller staff means fewer expenses.

Next steps

Now that you’re ready to work with a clearing house for your medical claims processing needs, what’s next?

Choosing a reliable company is absolutely crucial when you’re dealing with sensitive medical information. Make sure you’re in the right hands.

We offer a free live demo of our software, so you’ll know exactly what you’re getting before you commit. If you have any questions, don’t hesitate to contact us.

Posted in: Claims Processing

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How Technology Improved Medical Claims Auditing

How Technology Improved Medical Claims Auditing

When it comes to technology, perhaps no industry has been so helped by the advent as the healthcare industry

In particular, the claims audit process has evolved leaps and bounds with the development of software for the job.

Processing various claims by hand is tedious, painstaking, and frankly, takes too much time out of your day. In the healthcare industry, there are more things to worry about than audits – but how can you when they take up most of your time?

With the right software, you’ll be on your way to rearranging your priorities while still maintaining the accuracy that’s crucial to your job. 

Let’s take a look at how technology has helped shape the claims audit revolution and the amazing things it’s done for the industry.


The most obvious way in which technology has enhanced the claims audit process is by making it much more efficient. This one’s something of a no-brainer; a quicker, more accurate way of doing things will naturally lead to more efficiency.

Prior to the advent of technology, the billing and claims audit process was slow and tedious. With technology, things run much faster as we can process these requests in large batches.

Additionally, the software used gives us the chance to find any errors quickly. There’s no reason to do any of this by hand, though it’s always good to lend another set of eyes to a digitally-processed document.


The claims audit process had limited security in the past. With most of the work being done by hand, employees had access to personal information and financial contacts. 

While the risk of fraud was relatively low, the fact that the risk still existed was something of a turn-off – especially as physical copies of bills and claims were being stored.

Technology allows these items to be stored in the cloud. That means there’s no physical record on hand and no saved copy on someone’s personal computer. Everything is able to be stored electronically, and only those who needs access to the information have it.

The cloud is password protected, meaning that matters of security have become much less of a worry. Storing claims and bills is a much less risky process.


Sometimes, when things are done by hand, it’s possible for us to overlook errors multiple times. This can cause discrepancies between what we see and what the patient sees. 

However, while humans can be prone to error, computers typically aren’t. Most claims audit software both allows auditors to double- and triple-check their work and will bring attention to any glaring errors.

This means that there are fewer mistakes made, and those which are made are caught and fixed with ease. This means that there’s less chance of a claim being rejected, as the mistakes are typically caught before the claim is finalized.

This all ties right back into efficiency. With accuracy picking up, companies and auditors now have much more time to focus on other priorities.


The number of claims that need to be processed isn’t dwindling. Think about a number of claims received today, then think about processing the same number a couple decades back.

It’s a terrifying thought, isn’t it? You can almost see the physical mountain of claims stacking up. The thought of handpicking which claims to audit is even more daunting.

However, with the current software, it’s much easier. The process and task are still complex and require precision, but we can process claims much faster now. 

The claims with the highest error probability are traditionally the ones chosen for a claims audit, and with the speediness of the current process, we’re able to assess which ones are appropriate to audit instead of wasting time on trivial matters.

It can also provide you with data regarding how your organization is faring.


While there are some standard processes in the healthcare industry, each company is going to approach different processes with their own unique flair.

The advent of technology allows healthcare organizations to take whatever approach to claims audits that they wish. Regardless of how they choose to employ their own personal process, they can be certain that the software chosen will do its job properly.

This allows healthcare organizes an unparalleled level of freedom when it comes to conducting audits. 

It also allows managers to track the process every step of the way by providing a centralized dashboard. This means that anybody with the proper login credentials can watch an audit through every step.


When processing an audit by hand, it’s sometimes difficult to notice whether or not there’s an issue with any documentation or billing until you’ve already put in a vast amount of time into the project.

The great thing about technology for claims audits is that it takes this risk out of the equation entirely. The technology is so efficient that it’s capable of catching errors before even the most thorough human eyes.

Depending on the software used, it may even be able to resolve these errors without disregarding the work you’ve already put into it. Most software will even give each issue a new ID number. This means that managers or anybody involved can track each issue through the steps in the process.

Technology’s changed the claims audit climate

Technology has changed everyone’s lives in ways previously thought impossible. Ask anyone whether or not they expected to be holding miniature computers up to their ears as phones, and surprise will make itself apparent very quickly.

It’s important for all aspects of the medical industry to remain on top of technological developments. The further technology develops, the more lives can be saved.

As for the technical side of things, technology has allowed us to focus on different priorities for different organizations. Meanwhile, we haven’t had to make any sacrifices to accuracy.

If anything, technology has made us more accurate and ensured that we’re only auditing claims that hold water.

If you have any questions regarding the use of technology and software for claims audits, please don’t hesitate to contact us.

Posted in: Medical Claims

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How Medical Claims Processing Software Lowers Costs

How Medical Claims Processing Software Lowers Costs

Medical claims processing can be a costly and time-consuming chore for today’s health-care and medical professionals. It’s a daunting task, but it must be done accurately and efficiently.

Here’s the good news — today’s medical claims processing software is easier to use and more effective than it ever has been.

The added bonus? It actually lowers costs.

Manual Claims Management Costs More

Organizations that are filing medical claims manually are spending $4 more per transaction! Depending on the size of the organization that really adds up quickly.

Once you factor in the cost of labor on top of that, the costs get even higher.

On the bright side, by switching over to a more automated, electronic medical claims management system,  the savings can happen almost immediately.

The medical and health industry simply can’t afford to do things the old fashioned way anymore. 

Cutting Costs With Medical Claims Processing Is Essential

In today’s market, it’s not just a good idea to cut costs wherever possible — it’s essential. It’s what’s necessary in order to stay competitive and stay in business.

If a doctor can’t provide efficient administrative solutions, they simply can’t do their job in the health and medical field effectively.

Especially with insurance policies changing constantly, control must be taken over every aspect that can be controlled.

Much of the cost comes from the administrative department. Every dollar that is spent in the claims process matters now more than ever.

Why Are There Providers Who Still Hold Out?

Just last year, HIMMS reported that a full 31% of all medical providers were still handling denied claims using manual processes. That’s a fairly decent chunk of the market that is losing money and time.

Why on earth would any of today’s providers resist the move over to automated medical claims processing?

They’re moving slowly and they’re shopping around essentially. The same report found that 60% of those who are still holding out a plan to switch over within about a year.

In the meantime, of course, they’re losing money, not to mention wasting a lot of time. They simply do not realize how much better their claims processing could be. 

Healthcare Providers Are Losing More Money Than They Think

The case for faster adoption over to automated medical claims processing isn’t just about the $4 per file. Manual processing comes with an even bigger price tag than many providers are realizing.

A healthcare payer looks at the auto-adjudication (AA) rate. This refers to the percentage of claims that automatically pass through the system with no human intervention. 

There are situations that have been reported where the cost of a human filing a claim surpassed the payout. If that happens enough times, you can only imagine how expensive that can get for everyone involved.

According to Pricewaterhouse Coopers, inefficient claims processing was the second biggest factor driving up medical costs overall back in 2009. The amount totaled a whopping $210 billion annually

Thankfully, better and better technology is available all the time. More healthcare professionals are adopting the latest software technology to streamline the process.

Most importantly, switching over saves money.

Costly Errors Are More Likely With Manual Processing

Many of these happen when entering inaccurate billing codes. When that happens, claims are less likely to get paid in a timely manner.

The chances that a human will make that error far surpass the errors that an electronic medical claims processing system can make. Even when information is electronically added to CMS-1500 and UB-04 paperwork, it’s still less likely that errors will occur.

However, it’s not the optimal automated process.

Electronic Medical Processing Has Come A Long Way

Electronic medical claims processing is definitely not new technology, but it’s changed a lot over the years. Optical Character Recognition (OCR) is an amazing advancement.

It decreases the chance that costly mistakes are made when coding and filing.

OCR scans documents, electronically isolates, and then records the information contained in the fields. It can also auto-fill information.

In this process, a human is still involved, but it’s to review the processing and ensure accuracy, not be solely responsible for it. If a medical code is not properly recorded, the error is reported by the specialist who is filing the claim.

This check and balance process saves time, money, and frustration for medical and dental professionals. It’s so effective that they simply cannot afford not to make the switch to this type of system.

Resubmitting Is Less Labor Intensive With Automatic Claims

Mistakes and coding errors happen when filing claims. It’s a reality in the medical profession, but that doesn’t mean that they have to take a long time to fix.

Not only can you catch errors faster with medical claims processing software, but they’re less likely to happen in the first place.

To correct an error on a piece of paperwork from an insurance company once it’s been submitted is a time-consuming process.

If you make an error with claims software, you have help at your disposal. Many medical claims processing software companies provide 24-hour assistance. There are also online resources available. 

An insurance company is not going to give anyone helpful call or talk to them in the middle of the night when a claim hasn’t used the right code. The error will simply not be remedied within a timely manner, especially by today’s standards.

Making The Switch Is Simpler Than You Think

It’s only a matter of time before the entire health and dental industry is taking advantage of automated medical claims processing. The reduced financial burden that using this system delivers makes it worth it.

More and more professionals are making the switch and they’re happy with the results. 

The key is to choose the right software company. There are better options all the time and not every company is the right fit.

They have to be able to be there through the switch every step of the way. 

With the right software solutions and support, switching to an electronic claim processing system doesn’t have to disrupt business.

Contact a company like Apex EDI to schedule a free, live, and personalized demonstration

Posted in: Medical Claims Processing

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Medical Claims Processing: How the Right Medical Claims Processing Increases Profit

Medical Claims Processing: How the Right Medical Claims Processing Increases Profit

These days, more and more people seem to be noticing – and questioning – their doctor’s medical claims processing methods. But figuring out how your practice can cut down on medical billing errors is only a part of the process.  

When determining how to streamline the business side of your practice there is a lot to think about.

In this post, we’re going to clearly outline how the right medical claims processing can increase your bottom line.

It can even prevent your patients from challenging your medical bill.  

1. Make Sure You Know Each Insurance Policy’s Details

Your medical claims processing requirements will depend on the type of policy and the actual insurance companies of your patients. 

How are you bill these companies for reimbursement? Is it for operating costs, the expense of medical devices, or anything else?

All this, you know, depends on the claims submission process of the company. 

If you submit your claim incorrectly, you’re subject to slow repayment times. Sometimes, this means no payment at all. This leads to a lengthy appeal and resubmission process. 

To prevent this, we recommend researching individual policies prior to making a claim. You may even want to consider hiring someone to complete this process for you. The process can take around 6 hours every week to conduct the proper research. 

Additionally, look into webinars offered by Medicare and other policies to help keep you up to date. Always keep your finger on the pulse of policy changes. Even consider hiring a third party provider to help ensure you’re up to speed. 

2. Use Medical Claims Processing Software/Services To Improve Workflow

In a medical practice, the number of patients you’re able to see every day is directly tied to your profits. 

Using a medical claims processing service means your staff will be able to interact more with your patients. You’ll also get things done right the first time. Now, use office hours to focus on customer and patient satisfaction instead of filing claims and fixing problems. 

Especially in smaller practices, your staff is likely doing more than one job at once. Not only does this mean they’re more likely to make mistakes, it also leads to employee dissatisfaction. That can mean a high employee turnover rate. 

Getting the right claims services can help to make sure your employees are able to focus on the day-to-day operations of your actual practice, not the behind-the-scenes billing and filing work. 

This leaves both your patients and your staff satisfied.

3. The Right Claims System Cuts Down On Resubmitted Claims

It’s common sense. The fewer mistakes you make, the fewer resubmitted claims you have to file. That means you’ll be reimbursed and paid sooner. 

Look for professional billing and claims services that rely on experienced employees that focus only on the tasks of filing and fulfilling claims. You don’t always have the time or the resources to constantly train your own staff and keep up to date with the continuous policy changes. 

But a professional billing service will be up to date . That’s because that’s all they do. Look for services that also have 24-hour help lines or customer service representatives. Other DIY knowledge like forums and online resources where your employees can get basic questions answered the moment they arise. 

4. Look For An Analysis Of Your Claims Management

You’re always looking for ways you can save on time and costs in your practice, right? A good medical billing service can help. It can introduce you to options you weren’t even aware existed. 

They’ll scrutinize your current billing system and offer you ideas about how to improve your billin. They’ll also cut down on the mistakes you’re making.

Especially if you’re a newer practice, we know you’re eager to get things started off on the right foot. You might be concerned you don’t yet have the resources to do so. 

A good medical claims processing system and service acts as a cost-effective preventative measure that will help you ensure your business is streamlined. it will also keep it secure, and up to speed with current regulations. 

They’ll also help you to establish a plan for the growth of your practice, and make adjustments to your billing and claims processes as you expand. This way, you can spend your time focusing on how you plan to build your practice. 

5. Check That Your Billing Codes Are In Order

You likely already know that for every medical service or procedure you perform, there is a separate billing code. At least, there should be. 

Often, when practices are pushed for time or simply don’t understand the claims process, they’ll make the costly and careless mistake of assigning one billing code for an entire procedure. This can happen even if multiple, individually-coded operations or services were provided. 

This isn’t something your practice can afford to continue. It doesn’t matter what phase of business you’re in currently. 

And it’s not just the basic billing codes you need to make sure are correct. Each procedure also carries with it a 2-digit modifying code. For example, indicating which side of the body the operation was performed on.

If these aren’t included, you’re simply not providing the proper documentation to the provider. You’re likely going to miss opportunities for reimbursement. 

If this sounds like a lot to handle, it’s because it is. So why are you leaving it up to your already overworked staff? 

Instead, look into working with a medical claims processing service or software provider. They can make sure that you’ve submitted the correct claims to insurance companies – every time. 

Don’t Make One More Costly Mistake In Your Practice

By now, you can clearly see all the ways that the right medical claims software and practice can save you money, time, and even stress. 

There is no reason to continue losing money when the solution is so clear, and so available to you no matter the size or specialization of your practice. 

Want to leans more about where to find the best claim services, make sure you’re up to date with current policy changes, or to simply have specific questions answered? Spend some time on our website to learn about your options. 

Feel free to contact us to learn more about how we can help both your practice and your patients. 

Posted in: Medical Claims Processing

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