Laboratory billing is challenging, but there are five simple ways to avoid denials for increased collections. When it comes to denials in laboratory billing, there are two distinct types—“hard” and “soft” claims. Hard claims cannot be reversed because the revenue has been completely written off due to the age of the account or other factors. Soft claims; however, are only temporary denials and can be reversed if the claim is corrected within the allotted time. The five most common reasons for denied claims in laboratory billing are inadequate insurance coverage, service already adjudicated, duplicate claims, expired filing time, and missing information. Below is a breakdown of each claim denial.
Common Causes of Denied Claims
- Eligibility: When a procedure, test, or service is not covered by a patient’s insurance plan, and they did not confirm their benefits before services were rendered.
- Service adjudicated: This is when the services are covered by the patient’s insurance; however, a claim has already been submitted as part of another service.
- Duplicate claims: These are claims that have been submitted multiple times by the same provider for the same patient on the same day.
- The Limit for filing expired: This type of laboratory billing denial occurs when the medical claims have not been submitted within an allotted time frame since the service was provided. This can happen for numerous reasons, the biggest one being that rework rejection (usually done by an automated system) can sometimes take a long time to be completed.
- Missing information: Leaving a required field empty or incorrectly entering information are small mistakes that regularly cause denials in laboratory billing. Simple errors such as incorrect or missing date of birth, social security number, insurance ID, etc. are common causes for claims to be returned.
How to Avoid medical Claim Denials
So, what can you do to ensure claims are properly processed and approved? These simple precautions will drastically reduce denials and improve collections:
- Submit to the correct insurance carrier: Since submitting information to the wrong insurance can lead to a quick rejection of claims, it’s important that if a patient has multiple carriers, they are listing the right one and specifically stating that it is the primary coverage.
- Up to date insurance requirements: The requirements set by insurance carriers change frequently, so it’s important that you keep a close eye on any industry changes that have been made. As soon as you note anything different, it would update the information and your laboratory billing specialists.
- Eligibility verification: This means that for every patient encounter, you need to verify insurance coverage before services are rendered to avoid rejection of claims.
- Proofreading: This means just what it says. Make sure to always double check the information you have entered before submitting, and checking a third time never hurts. It takes just a few minutes to proofread but reversing denials due to simple mistakes is costly and time-consuming.
- Information collection: Make sure the receptionist or front desk personnel are requesting and documenting changes in patient information at every visit. Undocumented changes in personal information and insurance coverage quickly trigger denials.
Understanding the reasons for laboratory billing claims denials is just the first step of improving collections; implementing a system to avoid rejected claims is essential to the success of any medical facility. For reduced denials, reversed claims, and shortened reimbursement cycles, consider outsourcing to a reliable billing team that specializes in laboratory billing services.
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