Last month we looked at tools for getting clean claims out the door on the first try. Many billers or practices stop monitoring claims once the leave the practice management program, but this is where you are likely losing money. The unfortunate truth is you need to use the tools available to you to catch rejected and denied claims to ensure proper and timely payment. Today we will look at rejections and denials, and the resources you have (or need) to work efficiently.
The terms rejection and denial are used interchangeably in the billing world but they have distinct differences, including how you are notified. Let’s start with defining the differences.
Rejected Claims
- Claims can be rejected by the clearinghouse OR the payer
- Rejections are based on submission guidelines
- Rejected claims have not been entered into your payers system for adjudication
- Notified through a claim status report (ANSI 277) that comes back into most practice management programs from the clearinghouse
- Corrections do not require a resubmission code
Denied Claims
- Claims are denied by your payer
- Denials are based on policy coverage
- Denials have been accepted for adjudication and deemed unpayable
- Notified on remittance advice (ANSI 835/ERA)
- Payers may require a resubmission code and original reference number when submitting a corrected claim
If you are using a clearinghouse and receiving your claim status reports electronically, you will be notified quickly about rejected claims. There are two ‘checkpoints’ that will look for errors. The first is your clearinghouse, the second is the payer.
At each checkpoint claims will be Rejected or Accepted, these status updates come to you through a claim status report. If your practice management system is able to process these reports (ANSI 277) your claims will be updated with the accepted or rejected information you will be able to correct any rejected claims within your practice management system. When you see an error, start with checking who has rejected your claim. This will be the point of contact if you have questions about the rejection or how to correct it. If you are not already, make it a daily task to get your reports, correct any rejected claims, and resubmit those claims.
When a claim has been accepted by your clearinghouse and the payer it enters the adjudication system. This is where the payer will make a determination on payment based on the members coverage and your contract. The denials will appear on your remittance advice with a payment or as a zero dollar payment, indicating that they have reviewed your claim and they have determined no payment is applicable. If you are enrolled with you payer for electronic remittance advice (ERA) this file will come electronically and your practice management system will be able to list or identify denied claims. These claims will either need to be researched further for clarification on the denial or written off. It is vital that your practice management system can handle these scenarios appropriately so you do not lose money for payable services.
This is another scenario where technology can seem scary. However, efficiently monitoring and working is well worth the learning curve. If you are already sending electronically and not using the claim status report or electronic remittance advice – coordinate with your clearinghouse and practice management system to find out how these reports can save you time and money.
If you would like more information on creating workflows for rejections, denials, or enrolling with a clearinghouse, let RCM Insight help! Visit us at www.rcminsight.com to request a consultation.
[Contribution by Stephanie Cremeans with RCM Insight]
