The health-care revenue cycle involves more than just mailing out bills and collecting payments.
In fact, one of the most frustrating aspects of running a health-care organization can be tracking
claims throughout their life cycle. An efficient revenue cycle, along with the right claims
processing software, can keep things running smoothly. Working with a medical billing
clearinghouse can be the first step in ensuring medical claims processing goes smoothly. Here’s
how to avoid some common mistakes.
Understand Revenue Cycle Management
The revenue cycle is like a health facility’s circulatory system. It requires that several complex
processes function together for the overall health of the organization. Providers use revenue
cycle technology to track claims, isolate potential problems and regulate the billing cycle. Just
like the body’s circulatory system requires all parts to function correctly and in sync, every phase
of the revenue cycle must be integrated and optimized for efficiency.
The cycle starts when patients schedule their appointments and ends when the account balance is
zero. If mistakes impede progress at any point along the way, it wastes time and may result in
Use Technology Solutions for Revenue Cycle Management
Technology problems can lead to medical billing issues that interfere with medical claims
processing. Health-care organizations should invest in solutions that avoid lost income due to:
- Systems Lack Integration – When organizations use separate claims processing software for patient accounting, billing, health records, and collections, they might experience lost revenue. The more systems your organization uses, the greater the opportunity for error.
- Improperly Trained Staff – When staff members don’t understand the denial management process or know how to reduce patient billing delays, it can result in rejected claims and an increased number of denials.
- Physician Coding Errors – A mistake in correct ICD-10 coding can cause overbilling that results in failed audits.
- Contracting Process Mismanagement – Hospitals and medical providers must use technology that allows them to negotiate rates within the contracting process to maximize the available revenue from payers.
Research Top Reasons Claims Are Rejected
When health-care providers receive an Explanation of Benefits (EOB) showing the claim is
denied, it is most likely for the following reasons:
- Patient demographic information (age, birthdate, gender, address, etc.) is incorrect.
- Provider data contains errors.
- The patient’s insurance ID contains mistakes.
- Insurance information is out of date or the policy no longer covers the patient.
- Diagnosis code and treatment code do not match.
- Pre-authorization was required but not obtained.
- Error in place of service code.
- The service was not deemed medically necessary.
- Provider ID or NPI number was omitted.
- Modifiers are in error.
Providers should keep in mind that just because insurers reject a claim, this does not mean it has
been denied. Rejected claims are often not processed because information was missing or
insufficient. Oftentimes, a claim will be accepted and paid if the applicable information is
corrected and resubmitted to the insurance company.
If a claim is denied, the insurance company determined it was not eligible for payment. They can
still be resubmitted and appealed if there is additional information that supports its validity.
Avoid Error Causes
To reduce the number of errors that result in denials, providers should take steps to identify the
most common causes. Medical claims processing is a complex process, so errors will inevitably
Superbills are complex and vary by the provider’s specialty, the services rendered, and other
requirements. Medical billing employees may not be able to identify how best to enter
information, and if the provider is not available for clarification, they often use their best
judgement. This can result in errors.
Front desk employees can cause mistakes that lead to claim denial. If they don’t ask about
insurance or address changes when the patient signs in for an appointment, old information
might be all that’s available on file.
Inexperienced or untrained billing and coding employees cause errors. Medical billing software
is continually updated, so regular training updates are necessary. Providers who cut costs by
paying less for billing and coding may lose money because employees don’t understand the
insurance claim process.
Providers don’t post charges. Part of effective claims processing involves posting payments from
both patients and insurance. Unposted payments mean the balance still due can’t be collected.
Financial reports don’t tell you accounts receivable or give information on how much insurance
companies have paid so far.
Best Practices to Avoid Medical Claims Processing Errors
Eight percent of claims submitted are rejected over eligibility issues. Something as simple as a
missing signature can result in a denied claim. Prevent errors throughout the billing life cycle by
implementing the following changes.
- Avoid errors by submitting clean claims. Enter information directly from primary sources like the superbill or the patient’s insurance card.
- Train front desk employees to ask patients to update information when they sign in for every visit. Verify insurance status and coverage at every visit. It’s much easier to enter changes with the original claim than it is to correct errors and resubmit.
- Teach employees to ask patients if they are covered by additional insurance and to inform patients if there are a limited number of visits allowed and how much of the cost is the patient’s responsibility. Questions should be repeated on every visit.
- Analyze reports from your claims processing software. Use reporting features to scrutinize unpaid claims and accounts receivable to find recurring reasons for denial. Sometimes one insurance company can be more problematic than others.
- Use a medical billing clearinghouse to scan for information that is missing or incorrect.
- Code carefully so errors don’t occur.
- Employ seasoned billers and coders. It takes practice to correctly interpret EOBs and understand why claims have been denied or rejected. When you hire new employees, invest in quality training.
- Follow up on claims immediately. The longer you wait, the less likely you are to get paid.
- Solicit input from billers and coders. Often, they can provide insight on why errors occur and how to streamline the process.
- Simplify patient bills. With an increasing shift toward high-deductible plans, patients find themselves owing more for services. To plan for payment, they need to see a clear breakdown of what part of the bill is their responsibility.
- Train for top coding challenges. The American Health Information Management Association states that some coding processes create more errors than others. These include incorrectly inputting trauma and fracture codes, the misidentification of respiratory failure, and errors in documenting devices, components, and grafting materials. Offer regular ICD-10 coding updates to prevent these types of errors.
Ensure Successful Appeals
When insurance companies deny a claim, they sometimes require an appeal letter to reconsider
it. Send letters by certified mail so you have proof of delivery. Incorporate any information that
needs to be corrected along with documentation that supports your claim. Lab results,
physician’s notes, and any reconsideration request forms are helpful for a successful appeal.
Get to know the representatives responsible for denied claim resolution. Often, they can make
suggestions for successfully navigating the process and can explain the conditions and timeline
for claims appeal.
If you’re resubmitting a claim that was denied due to inputting mistakes, send the corrected
claim with a letter that explains what corrections you made to clarify and speed up the process.
If you have an unusual amount of trouble from one insurance carrier, realize health-care claim
processing standard requirements are different from one insurance company to the next. That
company may have an appeals process that is purposefully burdensome to reduce payouts.
Contemplate reporting them to the insurance commissioner for your state.
Work with a Medical Claims Clearinghouse
Each health-care organization generates mountains of electronic claims information. Each claim
has the potential to result in multiple denials, phone calls, resubmittals, and appeals.
Clearinghouses help providers and billing managers consolidate claims and administer them
from one location.
When health-care providers use medical billing software to create a claim, they will send it to a
clearinghouse for error checking. After the clearinghouse inspects the claim, they transmit it over
a secure connection to the patient’s insurance provider.
At this point, the insurer either accepts or rejects the claim. They are more likely to accept the
claim because the clearinghouse has already checked for missing and inaccurate data, blank
signature lines, and other issues that slow down the process. Once the claim is accepted, the
insurance company sends an electronic funds transfer along with an EOB.
Premium clearinghouses allow you to fix claims before submission, so they are corrected in
minutes, not weeks. They process claims electronically so reimbursement often occurs in less
than 10 days. Upload claims in batches instead of sending them one at a time to providers and
manage them all from one location.
Apex EDI simplifies medical claims processing. Our claims processing software streamlines
every step of the process. Contact us to find out why so many clients use Apex EDI as their
medical billing clearinghouse.
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