Having a claim denied can feel frustrating, but with the right steps, you can resolve the issue quickly and efficiently. Here’s a step-by-step guide to address denials and get claims back on track.
1. Identify the Denial Reason
When a claim is denied, the first step is to identify why. Check the Explanation of Benefits (EOB) or the denial notice from the insurance company. Look for specific denial codes or explanations, which typically appear in a section labeled “Denial Reason” or “Claim Adjustment Codes.” Common denial reasons include:
- Incorrect Coding: Mismatched or incorrect CPT or diagnosis codes.
- Missing Information: Incomplete documentation or missing required fields.
- Invalid Diagnosis code: Not all ICD10 codes are reimbursable by insurance, especially as a primary diagnosis. For example, most insurance companies do not reimburse Z codes.
- Coordination of Benefits (COB): Issues where the client has dual insurance coverage, and the wrong payer was billed first.
- Medical Necessity Not Proven: The insurer may deem the service unnecessary based on the diagnosis or insufficient documentation. This more frequently occurs if there is an unusually high utilization of services (patient seeing a therapist 2x or more per week) or for a very extended time period.
2. Review the EOB or Remittance Advice
The EOB provides a detailed breakdown of the service billed, what was covered, and why certain charges were denied. Carefully review the allowed amount, patient responsibility, and adjustments to understand if there’s a genuine error or if the denial is justified.
3. Correct the Error
Once you’ve identified the reason for the denial, take action to correct the issue. Common fixes include:
- Correcting Codes: If the denial was due to a coding error, update the CPT or diagnosis codes.
- Submitting Missing Documentation: Provide any additional information or documentation required to support the claim.
- Verifying Coverage: If the denial was due to COB issues, ensure the correct primary insurer is billed first, then resubmit the claim to the secondary payer.
4. Appeal if Necessary
If you believe the denial was incorrect, you can file an appeal. This involves writing a letter explaining why you believe the service should be covered, along with supporting documentation. Follow the payer’s specific appeal process, and ensure all required forms and documentation are included.
5. Resubmit the Claim
Once corrections have been made, resubmit the claim with the corrected information. Ensure that any supporting documentation is included to prevent further delays.
6. Monitor and Follow Up
After resubmission, keep a close eye on the claim’s status. Insurance companies sometimes take several weeks to process corrected claims, so following up regularly ensures it doesn’t get lost or delayed.
By taking these steps, you can quickly resolve claim denials and keep your billing process on track. It’s always important to stay proactive and organized, so any denials are handled quickly and don’t disrupt cash flow.
As a billing company, our goal is always to make sure that no claims hit 60 days past the date of service. Is this happening with your practice? If not, give us a call and we can explore how to make this possible for your practice!
At Clear Path Billing Solutions, we make mental health billing simple and efficient. From timely claims submission to handling denials, we take care of the details so you can focus on your clients. Let us streamline your billing process and improve your cash flow. Book your free consultation today!
