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.
Medcare MSO is a trusted name in medical billing services because we believe in providing extraordinary solutions that go above and beyond standard practices. We provide customized insurance & patient billing services, healthcare recovery assistance, and practice management solutions to organizations of all types and sizes. Our innovative medical software is engineered to simplify all aspects of practice management and patient engagement and is currently being utilized in over 80,000 healthcare facilities nationwide.
How Medcare MSO Reduces Laboratory Billing Rejections and Denials
While the ultimate effect is the same—the claim does not get paid—in medical billing, there is a terminology difference between a rejection and a denial. When a payer rejects the claim, it means they essentially are saying that they did not even process the claim.
A rejection would happen when the claim is sent to the wrong insurer, information is missing or incorrect, or there is a conflict in any piece of data. For example, if the patient’s name is Ann Smithe and one claim is billed for Ann Smith, it doesn’t match the payers records, so it gets kicked back. Likewise, if a date is wrong, it will trigger a rejection if any other part of that visit/treatment was dated differently.
Once a claim makes it through the initial screening and gets processed, if the payer says they aren’t paying it, that is called a denial. Claims can get denied because the service is not covered by the plan, necessary approvals were not obtained, etc. Or maybe an incorrect code was used, there was confusion about a bundled code or a required modifier is missing.
The Secret to Effective Claim Resolution Is a Proven System
Medcare MSO has been in the medical billing industry for over a decade and has found the secret to efficient billing is to have a system in place that eliminates common errors and gets claims filed fast. The second critical element of our system is tracking claims so none get lost and all rejections and denials are quickly addressed.
These are some of the basic steps implemented in our professional medical billing system. There are a lot more details, but this will give you some of the main points to apply in your own billing process.
- Each client is assigned two senior billing staff who will learn about that particular business and keep their medical billing on track. One is an account manager who you can call with questions and concerns. The other is basically a claims manager who will track each claim filed for you. If a claim is not paid, they follow up to make sure it gets corrected or modified as necessary and appealed so that you get the reimbursements you deserve.
- Dedicated teams perform the billing for each client. Every specialization has some common claim items and some unique billing aspects. Our medical billing staff is large and experienced in over 40 areas of specialization. We assign billers to your team who know your specialization and are familiar with the less common codes and any special coding requirements.
- After each claim form has been filled out, an experienced biller “scrubs” the claim for errors, looking at each of the common areas where issues occur. Spelling is checked, dates are confirmed, all required blanks are filled in, etc.
- Claims are processed daily and submitted within 48 hours in most cases. We continually add medical billers to our staff as our number of clients grows so that there are always enough billers to get the work done on schedule. Faster claim submission results in fewer lost claims and increased revenue in addition to the obvious benefit of simply getting you paid faster.
- Tracking claims keeps the process timely. There is a time limit for getting claims submitted and appealed. Because we track all claims, we know when one is denied and take fast action to get it remedied. That way you never lose money due to claims expiring before anyone follows up.
- No claims are abandoned. This is a huge part of what makes us so effective at increasing revenue for our clients. Millions in medical revenue are lost every year due to claims not being reworked after a denial. It can be very tedious and time-consuming for less experienced medical billing staff to figure out what went wrong with a claim and go through the process of appealing it. In fact—particularly for a low charge, high volume business such as a laboratory—it can cost more in staff time than a claim is worth, so claims may get piled up for “when I have time,” and eventually expire when they are managed in-house.
- Billing is removed from the patient’s environment. Medical practitioners and staff need to be able to focus on taking care of patients. In-house medical billing can be challenging because there are so many details and questions that inevitably arise. Figuring it all out takes away energy and attention that could be better devoted to patient care. Our staff don’t have patients, so can be focused only on medical billing.
If you have any questions or find it hard to believe that Medcare MSO consistently increases client revenue by $10,000 in the first 90 days, give us a call at 800-640-6409. We’d be happy to give you more information. You can even sign up to get a free demo here.