Top Reasons for Medicare Denials and Rejections

Fotolia_57298109_XSDid you know that Medicare has over 200 reason and remark codes that they use every single day when they are adjudicating claims?

In 2013, Medicare released their top reasons why medical billing claims are denied and rejected. Most practices believe that the majority of their medical billing rejections and denials are based on how the certified CPT coder or doctor chose to code. This is actually not always case. While it does happen, it is most often not the reason.

You may be surprised to find out that the top rejection and denial reasons are caused by work flow failures within the practice. It is easy to want to blame Medicare out of frustration, but many times it is little things that prevent a practice from being paid in as few as 15 days from the time a claim is submitted. So if you are experiencing Medicare payment delays, the reason may be one of a number of issues that happened on the practice’s end. Through good medical billing denial management, the problems can be avoided in the first place.

Ten Reasons for Denials and Rejections

The following are ten reasons for denials and rejections:
1.    The claim was submitted to the wrong contractor or payer, an error which is frequently associated with new Medicare advantage programs. For instance, a claim was sent to Traditional Medicare when it should have been sent to Railroad Medicare.
2.    The patient ID is not valid.
3.    There is another insurance primary.
4.    The patient name or date of birth does not match the Medicare beneficiary or Medicare record.
5.    The primary payer’s coordination of benefits is not in balance.
6.    There is only Part A coverage and no Part B coverage.
7.    The referring physician’s NPI is invalid.
8.    The zip code of where the service was rendered is invalid.
9.    The Procedure Code for the date of service is invalid.
10.    Simple user error, such as a mistake in the info submitted other than date of birth or name.

Medical Billing Denial Management

Revenue cycle denial management is a term that has become rather abused in the medical billing world. Some use the term to describe a method of addressing claims that have been denied for a medical procedure or treatment. Others have used the term to describe how some information is tracked for a particular payer, place of service, or set of procedures. Still, there are some that try and use the term to describe what they do every day in a physician’s office.

If you were to go to your billing department or your medical billing company the following questions, it is possible you would receive blank stares:

•    What is your revenue cycle denial management?
•    What is the process that you use to methodically measure revenue cycle denial management?
•    What are the quantifiable results of revenue cycle denial management?

Not many billing departments understand and value good medical billing denial management. It is good to have an audit or review of your existing system so that you can see what is happening and what the results of a good system would be. Methodical management for the billing process can accelerate cash flow and ensure that every claim is billed correctly. Reporting should be comprehensive and all denials should be tracked. If the system is used the right way, it can reduce first-time claim denials by over half. Unfortunately, there are many practices that do not have any way of monitoring whether or not the payer is denying a claim at an unwarranted or excessive rate or even what reason each claim is denied. Practices not aware of this data could be losing up to 20 percent of their revenue.

All in all, what is missing from billing operations that are troubled is the lack of management-reporting so that data can be extracted in a meaningful way. Couple that with a lack of methodical and measured billing processes and there is no way to know what is wrong in order to correct the mistakes. By having your billing practices reviewed and audited by consultants, you can identify issues so that you can hang on to any revenue that you are losing.

Don’t hurt your bottom line through medical claim denials just because the billing system within your practice may be full of errors. You can combat what is going wrong and make it right and MD Pro Solutions can help. Call us at 508-976-1665 or fill out our contact form and someone from our office will contact you.