Medical billing can be a very frustrating task for physicians who are handling too many business issues while trying to provide excellent clinical care. Because of this, many medical practices fail to collect around 15% or more of the money that is owed to them from insurance companies. However, with proper planning and the help of our billing services, your practice can expect to collect on virtually all of your claims. So, let’s discuss some of the many reasons why insurance claims can be denied.
1. Your claim was filed too late
Most insurance companies allow you to file a claim within 90 days from the time the service was provided. However, some insurance companies only allow a period of 30 days. When a claim is filed too long after the service was provided, it will be rejected.
2. Lack of proper authorization
Insurance companies often require the patient to obtain preauthorization of services before treatment, especially for non-routine services like hospitalizations, surgeries and behavioral care. If you provide services without the proper authorization, the claim will likely be denied. To prevent this from happening, you can obtain pre-authorization from the insurance company on the patient’s behalf.
3. The insurance company lost the claim and it expired
This is the most frustrating of all reasons for claim denial. Insurance companies can sometimes lose your claim. If the claim doesn’t eventually make it into their system before the expiration deadline, they will deny it ‒ even though it was their fault.
4. Lack of medical necessity
Routine services are generally not questioned as to whether or not they were necessary. However, the insurance company will usually require you to show a medical need for your patient to see a specialist or have surgeries. Most health plans base medical necessity on their own list of criteria, and if the claim is deemed not unnecessary, the claim will be denied unless you can prove otherwise.
5. Coverage exclusion or exhaustion
A majority of health insurance companies have a list of services they do not cover, such as cosmetic surgery, infertility treatment, and gastric bypass. Some plans may also have limitations on the amount of services they do cover. For instance, a health plan may cover only 30 days of inpatient treatment for a given condition. When you submit a claim for benefits that are excluded or have exceeded limitations, it will be denied.
6. A pre-existing condition
Many insurance plans have a pre-existing condition exclusion clause. If they discover a claim has been submitted for treatment of a condition that existed before the insurance policy began, they will reject the claim. They might even deny a claim for a separate, new illness, if any other kind of pre-existing condition was not initially disclosed. This is usually because the insurance company would not have offered coverage in the first place if the patient had disclosed the pre-existing condition in the beginning.
7. Incorrect coding
An insurance company may deny a claim because the coding was incorrect or inadequate. This can be resolved by resubmitting the claim with corrected coding.
8. Lack of progress
If a patient’s condition requires long-term care, or they receive long-term care with little positive results, many insurance companies will deny their continued coverage. However, this can sometimes be overturned on appeal.
If your practice is struggling with insurance claim denials, let us handle your billing and claims processes so you can focus on what matters most: your patients.