Why Your Practice Must Be Tracking Denied Medical Claims More Closely

Don’t ignore clues to improvement in the frustrating claims that come back.

In some contexts, 5-10% might not seem like much.

In U.S. healthcare, however, 5-10% is the average medical claim denial rate, and it means a lot of lost time and money for hard-working providers like you.

What percentage of your submitted claims are rejected? Unless your answer is a miraculous “zero,” you’re probably unhappy with your denial rate.

But complaining changes nothing. As the AMA’s National Health Insurer Report Card shows, commercial insurers deny anywhere from 1.38% (Regence) to 5.07% (Anthem BCBS) of claims. Medicare denies 3.78%.

A denied medical claim tracking system can help you deal with denied claims more constructively.

“Only about two-thirds of denials are recoverable,” writes the Advisory Board’s Morgan Haines, “but almost all (90%) of them are preventable.” Instituting and following a strong system for tracking denied claims is the first step you can take toward getting fewer of them.

Tips for Dealing with Denied Claims

We’re strong advocates of improved E/M service documentation at MDCodePro, so we appreciate efforts to better document other areas of your medical practice, too.

Here are a few pieces of advice for tracking denied medical claims and turning them to your practice’s benefit:

  • Medical-Claim-TrackingKeep a denied claims log
    Whether on paper or electronically, a log of denied claims is an invaluable aid to keeping track of what denials you’ve received and why. Your log should include dates of service, claim numbers, dollar amounts, the exact codes denied, the payer’s written correspondence, and your practice’s response, according to Physicians Practice. In addition to helping you keep records in order, tracking denied medical claims in a log helps you spot any trends faster when you analyze the data (such as every month). You’ll be able to take corrective action sooner and stop losing revenue for repeated mistakes.
  • Plan your appeals policy
    Appealing denials costs time, energy, and money you’d rather be spending treating patients. Some 50%-65% of denials are never worked, reports Medical Group Management Association. And with each claim costing $118 on average to work, it’s no wonder. Unless your denial rate is extremely low, you won’t be able to revisit every denied claim. So decide in advance which ones you’ll pursue. Communicate whatever criteria you choose—an amount of money, a specific service, or others—to your accounts receivable or other appropriate administrative staff. Invest your appeals resources wisely.
  • Educate around denied claims
    No matter how many denials you appeal, your practice can learn from all of them. What do the claims suggest your practitioners or coders should focus on? Verifying patient eligibility? Checking to see whether a claim has already been submitted? Making documentation more complete, or even more legible? Choosing the correct ICD-10 or CPT®  code? (Some codes change annually, as Dr. Sherif Hassan told Software Advice, so keeping current is one good way to stop potential denials before they happen.) Targeted training and continuing education can help you correct these common medical claim denial reasons.

Prevent More Claim Denials with the MDCodePro Method

What other reasons cause claims to be rejected? Careful medical claim tracking often reveals questions about a procedure’s medical necessity lead to denials. Payers’ inconsistent use of the term is part of the problem, but so is physicians’ insufficient documentation.

The MDCodePro app can help you make sure you’ve documented medical necessity with enough accuracy and in enough detail to support your practice’s billing claims. Our video lectures introduce you to simple strategies for documenting medical necessity, and our code generator guides you, step by step, in choosing any visit’s optimal CPT®  code.

We can’t promise you’ll never see another denied claim. But we can tell you that following the MDCodePro method, validated in audit after audit, is one of the best things you can do to reduce your risk of denied claims and increase your legitimate revenue.

Discover the difference MDCodePro can make to your practice’s performance. Sign up for your subscription today.

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