Appeals Improve Health Insurance Claim Denial Rates

Does your medical practice experience an unexceptably high denial rate from health insurers? Last summer, the American Medical Association released its fourth annual National Health Insurer Report Card. The results were disheartening, not only because the report reveals a gaudy amount of wasteful administrative costs, but doctors are not being compensated for what they deserve.

While the survey found that outright claim denials are down, doctors are still not reimbursed by healthcare insurance companies on nearly one in every four claims they submit. A medical practice management company can improve your insurance claim denial rate by appealing claim denials. Oftentimes, this isn’t even attempted by medical practices, leaving thousands of dollars on the proverbial table.

Don’t look at a denial notice as an indisputable fact. Since errors happen so frequently, every claim should be investigated. It could be as simple as a newly issued member number from the insurance company or something that takes a little more investigation. Regardless, given the fact that medical practices can increase their claim rate by tens of thousands of dollars every year, it’s a worthwhile endeavor.

According to a 2011 report from the Government Accountability Office, the majority of claim problems are derived from simple billing and eligibility issues. One of the more common issues is medical coding errors. A conflict between the CPT (Current Procedural Terminology) code describing the medical service or test the patient received and the ICD (International Statistical Classifications of Diseases) code that describes the diagnosis can result in a claim denial.

The AMA survey found that claims-processing errors by health insurance companies cost the U.S. $17 billion a year in avoidable administrative costs.

“Health insurers must put more effort into paying claims correctly the first time to save precious health care dollars and reduce unnecessary administrative tasks that take time and resources away from patient care,” said AMA board member Barbara L. McAneny, MD.

The AMA’s findings were based on about four million medical services submitted in February and March of last year to Aetna, Anthem Blue Cross Blue Shield, CIGNA, Health Care Service Corporation, Humana, the Regence Group, UnitedHealthcare, and Medicare. The insurers that saw the most improvement in denial rates were Aetna, Anthem Blue Cross Blue Shield, Health Care Service Corporation, and UnitedHealthcar

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Guide: Accountable Care Organizations

Click here to download our Guide: "How Independent Practices Can Succeed in a Healthcare Industry Shaped by ACO Programs". If you would like more information you can Request a consultation.

Practice Management

  • Anesthesia Billing
  • Full-service medical billing
  • Patient account management
  • Encounter form design
  • Patient balance collections
  • Learn More

MBA In The News

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