As reported by the AARP1, estimates from US Department of Labor say that around 14% of all submitted medical claims are rejected. That’s one claim in seven, which amounts to over 200 million denied claims a day. There are legitimate reasons that a claim can be denied, but it’s not unheard of for insurance companies will deny claims that patients have a right to. Here are a few of the reasons there are so many denied claims.
Medical billing and processing errors
There are estimates that between 40% to 80% of medical bills have errors 2. Some of them, such as duplicate entries, can cost the client more than they should. But transcription errors, like getting personal details or the insurance number wrong, can result in lots of rejected claims. Another common error on the side of the care provider is sending the bill to the wrong insurance company. If a patient hasn’t visited in a while, the system may have out-of-date insurance information. Both the patient and the provider should be aware of possible changes in circumstance if there has been a large period of time between treatments.
Certain procedures need pre-authorization
For exams like CT scans and MRIs, a patient may not be covered after the fact. It is the responsibility of the care provider to refer to the insurance provider and to get the procedure authorized in the first place. If it isn’t authorized and the treatment goes ahead as planned, it has a good chance of ending with a rejected medical claim.
The patient uses an out-of-network provider
Some insurance providers run an exclusive provider program, which means their policies only cover hospitals, clinics, and treatment within their provider care network. A patient going outside that network to a provider for elective or non emergency treatment may find their health plan rejecting the claim. Patients would be wise to ensure they know which providers are in-network, while providers should check the insurance policy covering the patient and highlight the potential risk.
The patient has charges that aren’t covered by their plan
Many patients are surprised to find out their insurance plan does not cover what they expected it to. This often happens with specific kinds of treatment like dental care and infertility treatments. To avoid this, a patient needs to take a closer look at their policy and scan the market for another policy if they want a treatment covered.
How can we prevent rejected medical claims?
Everyone can be much more aware of the causes of rejected claims. Patients can call the customer service hotlines of their policy providers to fix minor mistakes like clerical errors or appeal a claim. In some contested cases, a rejected claim may even end with legal action. Care providers can do more to ensure they are making fewer mistakes. Investing in automated claims processing software, for instance, can reduce the role that human error has to play. Depending on the situation, the patient, the care provider, and the policy provider can all be responsible for the 14% of all rejected medical claims. Find what part you have to play in the equation and be aware of the risks.