Six Common Reasons Medical Claims Are Denied

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Medical claims denials will happen. But how many denials are you getting per month? More than 10%? More than 20%? Not sure?  A recent Healthcare Information and Management Systems Society (HIMSS) survey shows that 3 out of 4 (76%) of healthcare leaders say denials are their greatest challenge. And other research shows that 90% of denials are preventable and two-thirds of them are recoverable.

A poorly managed claims process can be harmful to the financial health of your practice. It is natural to assume that accountability of claim denials falls on a billing team, however, everyone in the practice should claim part of the responsibility in avoiding denials. Think of the claim cycle as two different phases; pre and post-claim. Pre-claim, for example, is registration, charge entry, scrubbing, coding, and clearinghouse submission. Post-claim is after the claim is processed, paid, or denied. It is either posted and closed or goes to Accounts Receivables to be worked and appealed. In the pre-claim phase, the scheduler collects insurance and demographic information, the provider sees the patient, documents and codes the note, adds superbill, and finally hands it off to billers to scrub for accuracy, modifiers, and QC. If any of these steps are done incorrectly, a denial may be received.

Once the denial happens, if no one is following up on them, money is left on the table that eventually gets written off instead of collected.  What can you, as a provider, do to change this trend and ensure your medical claims are as clean as possible the first time around? To begin with, you need to understand some of the most common reasons a claim may be denied:


Before your patient is ever seen, did your staff verify their eligibility? Confirm coverage is still active? Are you still in their network of approved providers?


Does this patient need a pre-authorization or referral before services are rendered? Not obtaining one can cost both you and the patient. Make sure you have a reliable staff member who can ensure this process is done correctly.

Medical Insurance Form


Claim Form Errors

Sometimes claim denials are simply clerical errors – name misspellings or ID number transposition. Or it is missing pertinent information such as the date of accident or date of onset.

Coding Errors

Did the wrong code get entered on the claim? Was there upcoding or unbundling? Should there have been a modifier or was the wrong one used?

Claim Not Filed In Time

Each insurer has a timeline as to when a claim needs to be filed once a patient has been seen. Not knowing those timelines can cause denial and slow down revenue collection.

Duplicate Claim

Did someone submit a second claim when reimbursement hadn’t been received instead of following up on the initial one?

Not only do you lose the revenue from that patient’s service but there are costs associated with reworking claims that have been denied. For example, if you have 50 denied claims per month, and it costs $25 each to rework, that is $1,250 a month or $15,000 annually in additional costs that the practice is losing. And that doesn’t include the cost of the time for your staff to do the work.


How to Reduce Medical Claims Denials

The good news is there are ways to help your practice reduce the number of denials received every month. Below are a few ways of going about decreasing denial rates and increasing the practice’s bottom line:

  • Do not miss reviewing detailed monthly reports from the billing team
  • Sort summary of denial by most denied reason to determine where to make the largest impact
  • Self-train on denial reasons and code and guideline changes
  • Train staff on denial reasons and code and guideline changes
  • File claims promptly
  • Review process to identify gaps and inefficiencies in workflow
  • Outsource your revenue cycle management to an expert and remove the administrative work of medical billing, claim denials, and denial appeals from you and your staff

Making real changes in the number of denials will require re-thinking the entire revenue cycle from end to end. Changing the medical billing process to more proactive than reactive can have a positive impact on your bottom line.

Get Help Reducing Denials

Most physician’s office staff is already stretched thin, why add to the workload with the administrative task of dealing with denials? By outsourcing your revenue cycle management you can increase the number of clean medical claims being submitted with less stress on your staff.  Wouldn’t it be great to have up to 99% of your claims paid the first time?

At Billed Right we have highly trained AAPC Certified Coders and a HIPAA compliant team who can ensure a majority of your claims get submitted clean the first time, increasing your revenue and decreasing the time, money, and energy spent on denials.

Contact us today to learn more about how Billed Right can help you increase revenue and decrease your team’s administrative workload!

RCM Outsourcing: How Outsourcing RCM Could Vastly Improve Your Business

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Do you have insight into your practice’s financial health?

Do you know how much of your accounts receivable is older than 60, 90, or even 120 days? MGMA recommends that less than 14% of your A/R should be 90+ days old. They also show that 60 percent of the amount owed by patients is never collected. How much money are you losing on your A/R?

How many claims are being rejected or denied? Is anyone following up on them or is money being left on the table?  Change Healthcare’s 2020 Revenue Cycle Index shows that denial rates have grown by 23% since 2016. Over 11% of claims are being denied upon the initial submission. That equates to millions in lost provider revenue. But who has the time to follow up on denials?

The challenges of today’s healthcare environment can get in the way of your practice’s profitability and take away from the quality of patient care. Are you and your staff struggling with handling all of the administrative tasks, especially medical billing? Just keeping up with the ever-changing guidelines for insurance claims along with medical billing codes is a full-time job.

RCM Outsourcing Resources

Outsourcing Your Revenue Cycle Management

What if there was a way for you to lower your claim denial rate, increase you’re A/R collection, and improve your profitability, all while saving time and money? Outsourcing to a revenue cycle management (RCM) company is the answer.  Their only focus is to stay up-to-date on payer guidelines, medical codes, and ensure your practice is as financially healthy as possible.

To get a better idea of how outsourcing your medical billing can help the following are six ways a RCM outsourcing company can benefit your practice.

RCM Worker Outsource work

Increase Upfront Collection

How much time does your staff spend verifying coverage, co-pays, and deductibles? Outsourcing to a revenue cycle management company can help you ensure you are collecting the correct amount upfront from a patient.

Lower Operating Costs

Most doctors assume that engaging with a revenue cycle management company is expensive, however, the opposite is true. Standard industry practice is that the RCM gets a percentage of revenue collected, so they only get paid, when you get paid.  When you think about the cost of paying staff, offering benefits, and continued training for in-house medical billing professionals it is more cost-effective to outsource your RCM.

Increase Revenue

There are several ways an RCM can help increase your revenue. By ensuring you are collecting the correct amount upfront, submitting clean claims reducing the number of denials, and having a team to follow up on any denials in a timely fashion ensures you are collecting the most revenue possible. Thus improving the financial health of your practice.

Proper Coding and Documentation

Guidelines and medical billing codes are always changing. How do you keep up with these changes and ensure that claims are being submitted correctly and in a timely manner? Having a RCM company as a partner will take the stress of this off your plate by having a team of certified coders on staff to ensure clean and compliant claims are filed.

Save Time and Money

Having a team of medical billing professionals on your side can save you a considerable amount of time and money. You no longer have to worry about the training of your staff on guidelines and coding updates or billing procedures. The medical billing company also works within your PMS ensuring that all information is in one place making it easily accessible.


A big advantage to having an RCM is reporting. They provide an analysis of account receivables, denials, and actionable data that can improve the financial health of your practice.

RCM Outsourcing

Choosing the Right RCM Company

As you can see by the above list, revenue cycle management is about more than just medical billing. An outsourced RCM company should become a strategic partner and help you grow your practice.

Billed Right has been partnering with physicians for over 15 years. Our dedicated and knowledgeable team works hard to ensure that claims are clean and go through the first time, works any denials in a timely fashion, and collects outstanding account receivables to ensure you are receiving the most money for your services.

We provide you with an account manager and a team that is available via Live Chat or phone every day. With weekly and monthly reports along with quarterly and yearly business reviews, you are kept in the know through the entire process, giving you valuable insight into the financial health of your practice.

Contact us to learn more about how Billed Right can partner with you to increase your revenue and decrease time spent on billing!