What You Need to Know about Denied and Rejected Claims

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Billing employee frustrated on the phone over denied and rejected claims.

Denied and rejected medical claims can erode a significant chunk of your practice’s revenue, especially if you’re not set up to manage them efficiently. The good news is that the majority of rejected and denied claims are preventable and caused by common errors. You can make a big difference in your claim rate by identifying problems in your workflow, educating your team, and using the services of a reliable clearinghouse. Here are 5 important things you should know about how claim errors interrupt your revenue cycle.  

The Difference Between Rejected and Denied Claims 

Denied and rejected claims are not the same and will require a different approach. Rejections happen when the claim could not be processed by the insurance company because of some sort of clerical error, often with the information or formatting. Accurate documentation is so critical in healthcare billing that even one wrong digit is enough to land a claim in the rejected pile. These claims are never actually entered into the system and will be sent back to the biller with an explanation of the error. Rejected medical claims can be corrected and resubmitted, but it’s a task that can definitely add up and will affect your team’s productivity.   

A denied claim, on the other hand, has been fully processed by the insurance company and was deemed unpayable. Sometimes claims are denied because they contain a clerical error that wasn’t caught earlier in the process. In more serious denial cases, the insurance company determined that the bill should not be paid. This often happens if the procedure did not meet some aspect of their requirements for coverage. 

Dealing with denied claims can be tricky and time-consuming since you have to research the grounds for the denial and decide how to proceed. You can usually submit an appeal to the decision or a reconsideration request. Even if the denial was caused by a simple clerical error, your office will still need to go through with the appeals process because denied claims have already been entered in the system. Correcting the mistake and resubmitting is not an option because the claim would now be Rejected on the basis of being a duplicate.  

Common Reasons for Denied and Rejected Claims  

Insurance companies have very specific requirements for how claims should be filed, as well as strict requirements for which procedures will be covered under each policy. Many of the common errors that lead to a rejected claim will revolve around simple clerical mistakes, like writing the wrong date of birth or leaving required fields blank. There’s also an extensive range of data entry errors that can happen with medical codes, such as using a code for the wrong procedure, adding conflicting modifiers, or entering too few digits for a code.  

Denied claims will often be rooted in the patient’s eligibility to have the procedure covered, either because it required prior authorization or because the service was considered an exclusion from the policy. Patients often don’t know exactly what their plan covers, and insurance policies are complicated. This is why your practice needs to clarify benefits directly with the insurance companies. Apex EDI can be an indispensable partner for your claim management process by reviewing claims for errors and keeping track of each payer’s specific requirements. 

doctor on laptop
Enlisting the help of a clearinghouse can help preempt a lot of the issues that could cause a claim to be denied or rejected. 

How to Resolve These Issues Efficiently 

Most claim errors happen because of poor communication at some point between scheduling the patient’s appointment and submitting the medical claim. One common workflow issue is not verifying the patient’s insurance, either while making the appointment or at sign-in, which leads to overlooking changes in their coverage. Another example is when a practice uses out-of-date information about the insurer’s requirements for specific procedures. Being proactive and detail-oriented is necessary to hold down the rate of rejected and denied claims. The services of a reliable clearinghouse like Apex EDI can play an invaluable role in your claim management, including flagging potentially problematic claims before they even get submitted.  Apex EDI can also optimize your response to claims that get returned by working to resolve the issue as quickly as possible.    

One of the best ways to improve your claim acceptance rate is to analyze your data to identify any trends in payer denials and rejections. This is especially true when you’re noticing a measurable uptick in claims that get returned. If you dig deeper, it may turn out that claims with a specific diagnosis code or from a particular insurer are responsible for a disproportionate number of rejections or denials. This gives you the opportunity to investigate whether the insurer has changed some requirements recently or if a specific diagnosis code has been phased out.  

Finding the underlying cause of the problem will help you cut back significantly on the time and money spent resolving these claims. It’s also very important to coordinate effectively within your practice. If there are errors that keep getting repeated, make sure everyone is on the same page about how to avoid getting these claims returned.  

How Apex EDI Can Help You Save Time and Money 

I would like to take a moment and express my gratitude. Our transition to Apex has been the smoothest transition I have ever been involved with. From the moment we called Apex to request information regarding your services, we have had overwhelming support. I could not be more pleased with our decision to choose your company to do business with.Tracy Karle, Billing Manager

Receiving reimbursements in a timely manner is essential to purchase supplies, pay staff, and generally keep your practice up and running. That’s why it’s well-worth getting each medical claim right the first time.  

Apex EDI offers advanced electronic claims processing tools to help medical and dental practices reduce administrative costs while also improving their claim acceptance rate. Our OneTouch system integrates seamlessly with your current management structure to help you increase productivity, improve patient care, and receive faster reimbursements. The program offers a variety of rich features to optimize your medical claim process, including real-time verification of the patient’s insurance policy and the data on the claim.

We also assist your practice with managing rejections and denials, which will take many essential tasks off your plate. The end result is a faster and smoother claims cycle, with much less disruption to your cash flow. Schedule a Demo to learn more about how Apex EDI can contribute to the financial health of your practice.    



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