10 Steps Will Help You Prevent Denials


Healthcare policies and rules are continuously changing, and it’s important to stay on top of what all insurance carriers are doing and how their changes impact your practice’s revenue cycle. This, as well as managing your accounts receivable (A/R), is the best way to ensure your cash flow does not bottleneck and cause damage to your practice’s livelihood.

Here’s a synopsis of the process in 10 steps.

Step 1: Verify Insurance

Verifying insurance is the most important and most ignored step in revenue management. This should be done at the front desk during the first contact with the patient. With practice management (PM) systems now able to do insurance verification, there is no reason not to do it. Some tips when verifying insurance are:

  • Schedule patients with credentialed doctors.
  • Complete verification prior to the patient being seen.
  • Set up a financial policy (e.g., automatically billing a patient’s credit card if no payment is received after 30 days).
  • Collect copayments at initial visits.

Reading and analyzing insurance cards and identifying differences in key payers’ cards when billing is important for entering the correct info into your PM system. Things you should be looking for on the front and back of the cards are what the plan type is, the Payer ID, when the policy starts and ends, symbols, and whether there is a health savings account (HSA) linked to the plan. Our practice management system is only as good as the information we put in it.

Many insurance cards look similar with slight differences, such as payer IDs and rules, and many times the PM system will lump them all together, which can cause billing problems. After reviewing the insurance card, ask yourself, “Can all the cards with the same Payer ID be billed with one insurance carrier (for example, UHC Payer ID 87726) in your PM system?”

The answer would be no, because they may have different fee schedules and different coding rules and requirements for claims submission. It’s critical to enter each carrier separately into your system.

Step 2: Collect Accurate Information  During Patient Registration

Be sure all information is correct when registering the patient. The name on the insurance card should match the name on the registration forms exactly, and you should get the patient’s complete address; P.O. boxes should only be used for mailing purposes. Also confirm the phone number, insurance information, and employer are correct. If employment has changed, so may the insurance group number or policy. Other important tasks at registration include:

  • Make a copy of the patient’s ID, front and back.
  • Have all forms signed and dated, including the financial policy (signatures are only good for one year).
  • Collect copay, deductible, and co-insurance, as applicable.
  • Update intake forms annually.
  • Require the start and end dates for insurance carriers.

Check the intake forms to ensure they are accurate, review them at each visit to make sure nothing has changed since the last visit, and look for discrepancies. It is up to the person at the front desk to ask those questions.

Step 3: Check for Deficiencies in Provider Documentation

Deficiencies in provider documentation can cause all sorts of problems. Insufficient documentation can cause claims to be down-coded or denied, cause retraction of previous payment, or flag practices for prepayment review. Common documentation deficiencies that cause billing hang-ups are:

  • No patient signature for ABNs or financial policies
  • No provider’s signature
  • Missing pages in documentation
  • Physician orders/scripts are missing, incomplete, outdated, or illegible
  • Wrong or missing date of service (DOS)
  • Missing or improper CPT®/HCPCS Level II modifiers
  • Missing clinical/medical necessity for lab orders
  • Undocumented procedures
  • Missing details from the patient encounter
  • Cloned documentation

Table A and Table B to illustrate how improper coding can leave money on the table.

Table A Incomplete Coding

  • Patient was seen for stepping on a rusty nail, Left foot no foreign body provider gave Tdap vaccine. All documentation supported the level of care and the provider selected the following on billing sheet:
CPT Code Billed ICD-10-CM Codes Billed
99213 S91.332A
  • Did the provider bill for all the services provided? What’s missing?

Table B Complete Coding

  • Patient was seen for stepping on a rusty nail, Left foot no foreign body provider gave Tdap vaccine. All documentation supported the level of care and the provider billed the following:
CPT Code Billed ICD-10-CM Codes Billed
99213, 90714, 90471 S91.332A, Z23, W45.0XXA
  • Did we change what the provider did by adding these charges?

There is so much missing in Table A; for example, the vaccines aren’t accounted for. If you think about it, with the number of times vaccines are done — that’s a lot of money that we are leaving on the table. Table B shows proper coding. Depending on insurance, appending modifier 25 Significant, separately identifiable evaluation and management service by the same physician or other qualified health care professional on the same day of the procedure or other service to the claim may be appropriate.

Keep an eye on commonly missed charges, such as supplies, devices, injections, infusions, vaccines (administrations), venipuncture, and whether the patient is new versus established. Quickly identify when codes/charges are missing or there is an error in code selection. Small charges often missed quickly add up to thousands of dollars.

Step 4: Be Sure Coding Is Compliant

Not linking CPT®, ICD-10-CM, and HCPCS Level II codes correctly can have a negative effect on both compliance and reimbursement. Be sure you are following the coding guidelines for the insurance you are billing. For example, do you need to use a CPT® code, or, because it’s Medicare, do you need a G code?

Step 5: Make Sure Charge Entry Is Correct on the Claim Form

It’s important to know where the charge entry goes on the claim form. To know if something is correct or incorrect, you need to know where the information came from.

The order in which procedure codes are placed on a claim also can affect reimbursement, as shown in Table C. Some insurance carriers will pick it up and adjust it for (you), but some won’t. If this claim was sent to the carrier, you would want to send in a corrected claim for this. But don’t delay because there is a limited time in which you can submit a corrected claim.

 Table C Example of how billing can affect revenue

Billed Out in the Correct Order Billed Out in the Reverse Order
Procedure 1                     $2000              (100%) Procedure 2                    $150              (100%)
Procedure 2                         $150             (50%) Procedure 1                  $2000               (50%)
Total paid out                   $2075 Total paid out                $1150
Difference in revenue       $925


Eight tips for charge entry review:

  1. Make sure allbillable charges are entered.
  2. Properly link the charges.
  3. Review for lost revenue (administration codes, supplies, etc.).
  4. Determine if code modifications are necessary for reimbursement such as applying modifiers, multiple procedure rules, or rules for different providers (advanced practice nurse vs. provider).
  5. Make sure the referring doctor and ordering doctor are in the correct places (sometimes the ordering doctor is the same as the referring doctor).
  6. Check for the correct DOS and correct date of onset.
  7. Check the National Provider Identifier (NPI) or Provider ID number.
  8. Make sure the charges are entered in accordance with payer policy.

Step 6: Submit the Claim

Before you click the claim submission button, prepare the claim and determine if any modifications are needed. An example of how three claims submitted for the same services for United Healthcare (UHC) all needed different reimbursement modifications because insurance card No.1 followed UHC rules and guidelines, insurance card No. 2 followed Medicare rules and guidelines, and insurance card No. 3 followed Medicaid rules and guidelines for chiropractic services.

Another important thing to remember is “some insurances will not allow or won’t even look at more than four diagnoses, so … try to make sure that (your) first four diagnoses are being pointed wherever (you) need them to be. … Most of them are going to pick up that primary one.” Be sure you are pointing the diagnosis correctly to justify the procedure that was done.

Step 7: Evaluate Your Payment Posting Process

When posting payments, you need to know your gross collection rates (GCR) and net collection rates (NCR). Pay attention to whether your carriers are paying your contracted fee. If they aren’t, you are going to have to appeal that. You also need to know if you are bulk posting or line item posting, and know when a contractual obligation (CO) is not a write-off. Understanding the difference between a denial and rejection is of importance as well.

To evaluate the payment posting process:

  1. Reconcile remits. Make sure payments correctly match in your PM system.
  2. Audit CO write-offs. There are times when a CO is not a true write-off.
  3. Send timely statements. Move patient balances over right away.
  4. Generate reports through the PM system for write-offs and adjustments to make sure they are correct.
  5. Handle and resolve denials.

It’s important to understand why a claim didn’t get paid and use that information to educate other staff and providers. Then, implement quality measures to catch errors.

Payment posting is what is going to give you a true picture on how your practice is doing financially.

Step 8: Work on A/R

The most important aspect of managing A/R is follow-up. You must be able to research and know where to search. Decide whether your A/R should be worked on weekly, monthly, quarterly, or yearly.

Your goal should be to keep insurance A/R aging under 90 days. When working on A/R, start with time-restricted carriers, then go to the largest outstanding balance. Next, run a report by carriers and divide the follow-up work between your team members. Sometimes the best way to resolve payment hiccups is by picking up the phone. When following up, document all your payment attempts via notes, letters, phone calls, email, etc. This information will help if you need to appeal.

To keep patient A/R from aging, offer automated alerts and several payment options, such as:

  • Payment portals that are tied to your PM system
  • Credit cards and debit cards
  • Checks and cash
  • Merchant accounts through your website
  • Money transfer apps set up for business (e.g., Venmo, PayPal, Zelle)

Get patients involved early if there is an issue, and identify the reason for delays, such as job loss/reduced income, emergency, loss of coverage, or change of coverage.

Working the A/R is the most time-consuming aspect of billing, but most rewarding when done correctly.

Step 9: Analyze the Causes of Billing Denials and Delays

Know the difference between a rejected claim and a denied claim. A rejected claim means you did not have the necessary information to determine coverage, such as a billing error, and the claim does not afford appeal rights, nor can it be reopened. A denied claim does not meet the coverage criteria.

It’s estimated that denials and rejected claims cost the healthcare industry over 1 million dollars annually. But approximately 93 percent of rejections are due to data entry and are preventable, while 70 percent of denials can be overturned. Causes of rejections, delays, and denials include:

  • Not performing insurance verification
  • Missing or misuse of modifiers
  • Not understanding the differences between rejected and denied claims and how to correct them
  • Not appealing when you should

It’s essential to know how to read the remittance advice (RA)/explanation of benefits (EOB) and know where things go in your system. Don’t just resubmit the claim without finding out why it was rejected or denied in the first place.

Step 10: Run Adjustment Reports and Use them as Learning Tools

Finally, effectively monitor your organization’s A/R by running reports on:

  • Practice analysis
  • Insurance analysis
  • Charge and payment analysis
  • Patient aging
  • Secondary claims status
  • Denials
  • Adjustments
  • Statement cycles

Run these reports by the DOS rather than the date of post. Use the reports as staff learning tools, set up goals, and make staff accountable to fix errors hurting your practice’s revenue cycle.

Key Acronyms for Managing the Revenue Cycle

According to an expert, when talking about revenue cycle management, you need to know the lingo and common acronyms:

A/R – Accounts receivable

CARC – Claims adjustment reason code

CO – Contractual obligation

EOB – Explanation of benefits

ERA – Electronic remittance advice (or RA – Remittance advice)

GCR – Gross collection rate

KPI – Key performance indicator

NCR – Net collection rate

OA – Other adjustments

PM – Practice management

PR – Patient responsibility

RARC – Remittance advice remark code

RCM – Revenue cycle management

For More Information:  https://www.aapc.com/blog/86187-establish-a-healthy-revenue-cycle/