Even if the monetary totals at stake are small, denied insurance claims can add up and negatively impact your practice. This author provides pearls for ensuring your denied claims receive payment, offering insights on dealing with insurance companies and the importance of thorough documentation.
Denied claims can be very frustrating as it requires time and money, not to mention a great deal of antacids, to appeal a claim. Often when the dollar amounts are small, it may not appear to be worth it as an appeal can be a net loss even if you win the case.
Accordingly, I’d like to offer some helpful suggestions to develop an office protocol that might make this process somewhat easier.
Proper claims processing protocol should include using up-to-date billing information such as the latest edition of the CPT, ICD-9 and HCPCS coding books as well as any other manuals that insurance companies may provide. There needs to be a clear handoff from the provider (superbill) to the biller (transmission of the claim form) and on to the insurance company to make sure this process goes smoothly.
Start with the simple things. Make sure there are no transcribing errors. For example, perhaps the biller used codes that were not listed on the superbill or used codes that were undocumented in the chart. One must properly match CPT/HCPCS codes with ICD-9 codes as a mismatch could be the source of the denial.
The correct use of modifiers is very important when submitting claims. Obviously, using the incorrect modifier is a problem. However, sometimes offices add modifiers when there is no need for them, thinking that the more the merrier or that adding a modifier cannot hurt. This also could result in a claim denial as the carrier’s computer cannot handle an unwarranted modifier. If you are unclear on the proper use of modifiers, take steps to better understand what modifiers to use.
Also look for technical issues. Make sure your electronic system is compatible with the insurance company’s software. Make sure that what you transmitted is what the insurance company received. There are multiple glitches that can occur in the electronic transfer system. Most insurance company claims processing software should follow a standard language. However, if what you billed does not match up with what the insurance company processed, verify what the practice sent to determine which end of the transmission has the problem. If there is a transmission discrepancy, you should check with the insurance company’s IT department as well as your own software vendor.
For paper claims, make sure the information typed on the claim form is properly aligned on the lines and within the boxes on the claim form. If it is out of alignment, then the scanners that insurance companies utilize may not accurately pick up the information.
Make sure your staff has filled out the claim forms, either paper or electronic, properly and completely so they list all the information that is required. Some technical errors include simple transposition of letters and numbers, fields left blank, and mismatches between the place of service and evaluation and management.
When a claim or authorization request has been denied, a designated person should take ownership of that denial. First, one needs to research the claim to see if there is an error on the part of the office, either due to the doctor or staff. If your investigation has determined that it is your error, there should be office protocols in place to identify and correct any office-based error.
Although claim denials have an obvious negative connotation, this is an excellent teaching opportunity, creating a more positive spin to this situation. This will create a more harmonious office situation rather than always setting a negative tone. Do not stick your head in the sand. If you do not address the denials head on, then the errors (and associated expenses) will continue.
Read the explanation of benefits (EOB) closely as some claims actually need formal appeals while others may simply need correction. This is especially true with Medicare, which may reject the claim outright because of certain errors. One simply needs to correct this type of claim and submit a new corrected claim. If the claim has been adjudicated in some form, then you need to file a formal appeal. Simply submitting a corrected claim (when it should be appealed) will end up with that second claim being processed as a duplicate. Check with each carrier to verify what claims need correction and what claims need an appeal. Some common errors that one could correct may be transposition errors, an incorrect date on the claim form or other technical issues.
If the error seems to be on the part of the insurance company, write a letter addressing your issues and why you should receive payment for the claim. When writing your appeal letter, be clear and concise. Make sure you address the reason why the company denied your claim. Adding inflammatory comments to the letter serves no purpose. In order to bolster your case, you may submit additional information such as lab tests, diagnostic studies or chart notes/consult letters from other providers. You may submit literature articles if the carrier deems a procedure to be investigational.
When appealing the claim, look at the EOB carefully and see if there are clues as to why the insurance company denied the claim. When appealing a claim, it is important to ensure you have addressed the issues noted by the insurance carrier. Certain information may be missing and arguing medical necessity would not be of any value because that is not the basis for the denial. Ask for the carrier’s written policy as that may give you clues if in fact the services are covered or if they were incorrectly denied.
You may also inquire as to what bundling software the company uses if services were bundled together so you may adequately address the bundling issues. Sometimes submitting information from other carriers may help bolster your claim for payment, especially for claims based on relatively new procedures. Other issues to appeal could be incorrect payment and that would be based upon the carrier’s fee schedule that you should have access to as well.
Once you have written the letter, however, there still needs to be follow-up. It seems all too frequently that every appeal letter process inevitably ends with a phone call in which the insurance company claims it never received the letter. Therefore, the practice needs to develop some sort of system by which you contact the carrier to make sure it has received the appeal. The system should also ensure you find out the expected timeframe for receiving the answer and then following up with a letter or phone call at that time to make sure the carrier has addressed your appeal.
Many insurance companies have as part of their contract a designated timeframe when one needs to file appeals. If there is no documentation of sending an appeal, you may lose your appeal rights even though you have a valid argument. Sending the appeal letter via registered mail with the return receipt is an excellent way to ensure you sent documentation that the carrier received. This puts the onus on the insurance company to process your appeal. While this may seem time consuming and costly, I would suggest using return receipt mail if the dollar amount of the appeal is high.
Your best defense in an appeal is your chart note. This should clearly indicate the patient’s chief complaint, your examination, services performed and eventual decision-making. This will bolster the validity and medical necessity of any diagnostic tests or procedures/services you performed. Chart notes are especially important in evaluation and management services as the office level selected needs to meet specific criteria.
Briefly, an evaluation and management service requires documentation of history examination and decision making. There are different levels within each category such as problem focused, expanded problem focused, detailed and comprehensive examinations. The diagnosis alone does not determine which of these categories you select. Rather, it is the documentation in your chart that determined the category. If the patient presents with a very complicated problem but the chart note is only a few lines long, that service may not qualify for a higher level code. If you perform procedures, make sure there is a procedure note that validates the billed codes.
When selecting a procedure code, be careful not to unbundle. If there is a code that represents the various components that you performed, you should bill that single code. That said, make sure you bill for all the services you rendered. If you are unclear as to what may be considered as included in another procedure, this is another source of education that the office should investigate.
When performing diagnostic studies, you have to document medical necessity. Simply doing “rule-out” type tests may not meet payment criteria and accordingly meet with denial. There must be documentation of a written report indicating a properly performed examination and a proper interpretation.
Should the practice review paid claims or just the denied ones? Although it is obvious that denied claims need review and appeal, do not disregard those claims that receive proper payment. Remember that audits occur on paid claims. You should spot check even the paid claims periodically to make sure you are billing properly as sloppy billing practices may still result in both payments (eventually possible audits) and claim denials. This is a way to protect yourself from audits, which can be very disruptive and costly to the office.
In addition, if there are problems with an insurance carrier to the degree that getting authorizations and getting claims paid correctly (and promptly) is difficult, and if the carrier does not seem to be willing to work with you to solve problems, then one consideration is simply not to provide services for that insurance company. You are not obligated to provide services to all patients and all insurance carriers.
If you elect to treat a certain carrier’s patients, then you must follow the company’s rules as far as claims processing, appeals and fees. Keep in mind that some carriers do contract out services such as diagnostic studies or durable medial equipment. Therefore, appealing these services as a non-contracted provider of those services may be a waste of time. Overall, if providing services to a company’s patients is too onerous, then it may not be worth it to deal with that insurance company.
Dr. Poggio is a California Podiatric Medicine Association Liaison to Palmetto GBA J1 MAC and a medical consultant to several national health insurance and review organizations. He is a member of the American College of Podiatric Medical Reviewers and is board certified by the American Board of Podiatric Orthopedics and Primary Podiatric Medicine.