Did you know that over 80% of medical bills have at least one error?
As you can imagine, these errors cause serious issues when it comes to a healthcare organization’s revenue. Simply put, if medical billing errors exist…they’re not going to get paid.
You see, healthcare organizations need to collect payment from two separate sources every time they provide services. The majority of patients have health insurance. Health insurances only cover so much for services rendered. The rest falls on the patient as their responsibility.
Since there are two financially responsible parties for every service that a healthcare organization performs, there is a lot of room for error.
Luckily for you you stumbled upon a blog post written by a healthcare clearinghouse and revenue cycle management company with over 25 years of experience. In other words, throughout our tenure we’ve experienced a thing or two when it comes to helping our clients sort through and identify healthcare reimbursement issues.
Thus, we’ve started to notice some patterns. So, let's take a look at the 8 most common healthcare reimbursement issues!
Table of Contents
Issue 1: Claim Denials
20% of claims sent to insurance companies get denied and returned to the billing department.
This is THE most common issue a billing department will receive when trying to get reimbursed from insurance companies. Billing departments will then have to review the denial code to understand the reason the claim got denied.
Unless you have a robust denial management software (we have one), this requires some serious investigatory research.
Once the billing department identifies the error that denial code refers to, they’ll fix the errors and send it back to the insurance company.
Here are the most common reasons Claims can get denied
Incorrect Patient information
Out-of-Network Physician
Duplicate Claims
Claim filed after the timely filing Limit
Now you may be wondering, is there a way to help avoid claims getting denied? The best way to avoid denials, is to use a clearinghouse (like us) , to scrub the claims. Scrubbing the claims can help ensure they do not get denied, by removing any errors.
Let's discuss how claim denials affect the healthcare reimbursement process.
When a claim gets denied, it delays the amount of time it takes for the physician to get the payment.
The other way denial claims affect the reimbursement process, is by decreasing the overall productivity in the office. If staff are focusing on fixing denied claims, this can be a lot of time wasted. They could be using their time by sending out more claims, decreasing the time it could take for the physician office to receive the claim.
Issue 2: Staffing Issues
When hiring new staff members to your team it’s vital that you train them with the company's protocols. If you fail to do this small step, your team members can cause issues in the reimbursement process.
Without training it can cause an increase in denials, and postponing the time you will see time you will receive the payment.
A lack in staff training can also cause customer service issues. It can create a strained relationship between the customers and your company.
You also need to ensure that you are regularly keeping up with employee training to try to lower any reimbursement issues from occurring. Training your team just once won’t be enough in the constantly evolving industry of medical coding and billing.
Issue 3: Changes in CPT Codes
According to the American Medical Association, Current Procedural Terminology or also known as a CPT code, updates every year.
These updates aim to keep up with the ever changing medical system.
Understanding when these codes are set to change and how to prepare is vital. This is why regular training of your team members is essential. There is currently a plan to update the CPT codes starting January 1st of 2025.
According to the American Medical Association these will include…
A Total of 420 updates
270 new codes
112 deletions
38 revisions
If you do not code procedures in accordance with the new update, it’s going to lead to a mismatch in procedural data. That mismatch will trickle down to the billing team and ultimately lead to more denials.
Ensuring you stay up to date with the new updates will help make sure you receive your payment as soon as possible.
Issue 4: Patient Care Autonomy
With the expanding health care industry, patients have a lot of choices to make when trying to decide what physician to see. Depending on where they go will decide how long it takes for the office to receive the reimbursement from the insurance company.
Before the physician office sees a patient, checking the eligibility of the patient is vital.
Checking eligibility will tell the office, if the patient's insurance company will cover the appointment.
If their insurance company doesn't cover anything, the office should tell the patient that they will be responsible for the entire bill to avoid late payments or having to send invoices to collections.
Issue 5: Poor Communication
The easiest way to delay the payment process is poor communication, as it can happen at any stage.
If there is a lack of communication between the medical staff and the billing department, it can cause the bill to get miscoded.
If it gets to the insurance company with the wrong code, it will get denied and sent back. If there is a miscommunication about what gets covered between the patient and the physician office, the situation can become problematic.
This is because the patient could be expecting a smaller bill, if they receive a larger bill than expected it can delay the payment.
Issue 6: Lack of Prior Authorization
In some cases, there are certain types of appointments or procedures that require prior authorization.
Ensuring that patients have prior authorization is the healthcare organization’s responsibility.
If your office fails to receive the authorization, this will cause a delay in the reimbursement process.
Here’s why.
When the physician's office submits the bill to the insurance company with no prior authorization, it will come back as a denial or the patient will be responsible to cover the payment.
If the patient is expecting the insurance company to cover most of the bill, when they find out they’re not covering anything it will be a shock. They may not have the full amount requested and may need to be on a payment plan. Which will require you to wait for your payment even longer.
Issue 7: Virtual Care
With the rise in virtual care, it has been an adjustment for the healthcare industry, especially their billing departments.
Before 2020 there were CPT codes that dealt with virtual care and a protocol on how to bill it.
There are different codes for in-person appointments and virtual appointments.
Coding it wrong will result in a denial. To avoid this, hiring a clearinghouse to scrub the claims can help ensure no further errors that will cause a denial.
Issue 8: Lack of Insurance Verification
When a patient comes to your office for an appointment it’s important that you verify their insurance.
Verifying their insurance your office should involve checking to make sure the policy is active and that the patient's information matches what is in your system.
Verifying these two aspects seems simple, but they can help stop reimbursement issues on the front-end of the appointment cycle. Usually, you can work these checks into the eligibility step I mentioned earlier in this blog.
What happens if you do not verify that information?
When it comes to billing the patient if the policy is inactive or the patient's information is incorrect will cause you to receive a denial. The best way to avoid these denial codes is to stay proactive when the patient is in the office.
Conclusion
On the surface, the reimbursement process might sound easy. A patient comes to your office, they have insurance that covers a portion of the medical bill and then you collect the rest from the patient.
In practice, however, the process is much more cumbersome and there are plenty of stages throughout it that open up the door for errors that lead to reimbursement issues.
Ultimately, the best way to avoid healthcare reimbursement issues is by playing defense. It’s vital that you train your staff on the best practices, and continue their training after they’ve started. This will help minimize any errors they might have made, or prevent any miscommunication from happening.
Additionally, you should think about hiring a third-party revenue cycle management company for clearinghouse services. This way you have an extra safeguard against claim denials through the claim scrubbing process.
They can help ensure you correct all errors before sending your claims to the insurance company. By doing these small things is one of the many things you can do to help streamline the reimbursement process.
