Submitting healthcare claims is a complex and ever-changing process as new technology and regulations bring changes that make understanding claims processing sometimes feel like a moving target. Understanding claims processing is an evolving skill, but learning the basic language is the first step to successfully navigating this landscape. One of the keys is knowing the difference between rejected and denied claims.
We look at the definition of rejected and denied claims and share how Missing Piece, a leading ABA therapy billing services, can assist.
Claims rejections
Claims rejections occur when the clearinghouse or the payer stops a claim from entering their processing system. This is typically due to missing, incomplete, outdated, or incorrect information included in the claim. When claims fail to enter the payer’s processing system, ABA consultation and service providers do not receive an explanation of benefits or remittance advice for the claim rejection. Depending on the processor, providers may or may not receive a rejection notice from the clearinghouse or other electronic system.
When the statuses of claims go unmonitored, rejections can be especially problematic for providers, their patients, and patients’ families. It is not uncommon for providers to wait for a notification to trigger action on unpaid claims. In the instance of a rejection that does not include a follow-up notice, a significant amount of time may pass before realizing a claim went unreceived. At this point, deadlines for timely filing requirements may have passed for the payer. Unfortunately, timely filing denials are rarely overturned when appealed, making it extremely important that, as part of a claims review process, providers have a method for monitoring rejections.
The impact of rejected claims within an ABA practice can have a ripple effect throughout your organization. Rejected claims not only lead to a decline in revenue, affecting your practice’s ability to fund services and potentially impacting patient experience, but also increase the workload for billing teams. This extra work of re-examining and resubmitting claims diverts attention from processing new claims, and adds to operational costs. Furthermore, the frustration among employees, who must address these issues or feel the effects of reduced revenue, underscores the cascading negative consequences of claim rejections. Efficiently managing and minimizing the instances of claim rejections are crucial for maintaining the financial health and operational efficacy of a healthcare practice.
To avoid this, learn how to appeal insurance claim denials and correctly file ABA claim submissions.
Claims denials
Claims denials are claims that are received by the payer, processed, and then denied. Why are claims denied? Some of the more common claims denial reasons include:
- Issues with eligibility, coverage, or coordination of benefits
- Authorization problems
- Misinformation on the claim form
- Incomplete information on the claim form
- Incorrect or incomplete processing by the payer
It is important to note that a claim that is processed by the payer and posted to a deductible or coinsurance is not considered a denied claim.
When a claim is denied, providers may be notified of this in a few different ways, including on explanation of benefits (EOB) documentation, explanation of payment (EOP) documentation, electronic remittance advice (ERA) and/or other methods by which providers are notified of claims payments and statuses. A denial response will typically include the reason for the denial. As a provider, you have a limited window of time — one that can vary significantly by payer — to respond to the denial and submit either a corrected claim or a new claim altogether.
Following up on denied claims is an integral part of revenue cycle management. Many providers assume that once they submit a claim, their job is completed, with a timely payment on the way (if only in a perfect world). An experienced Accounts Receivable representative is aware that follow-ups on claims submissions are necessary to ensure payment is received.
Find the full list of Medicare claim denial codes here.
Improving claim rejection and denial rates
Regardless of whether your practice makes use of an in-house team or employs external services for coding and billing, implementing key procedures is essential to minimize claim rejections or denials. These steps include:
- Monitoring and evaluating recurring trends in payer denials and rejections to formulate reduction strategies.
- Providing training for your billing team on effective denial management techniques.
- Conducting regular audits to detect issues prior to submitting claims to the payer.
- Collaborating with payers to refine — and potentially eliminate — contractual stipulations that lead to denials.
- Leveraging billing software solutions or engaging a specialized vendor to manage and mitigate claim denials and rejections efficiently.
Simplify the process with Missing Piece
Does the pressure of claim follow-up and accounts receivable management create stress for you? Understanding the difference between rejection and denial in medical billing makes navigating the process that much easier. Let the experts at Missing Piece Billing and Consulting help you with your behavioral health and ABA billing needs. Our experienced staff incorporates best-practice payer-specific policies and protocols on a daily basis. We ensure that your behavioral health and ABA claims are not rejected or denied, especially due to avoidable issues like incorrect ABA billing codes and out-of-date payer profiles, and that they are paid correctly and on time.
To learn more about how our comprehensive revenue cycle management process assists ABA services, contact us online or by phone at 765-628-7400.