Rejection is part of billing department. However, we have separate and dedicated team who is only taken care off rejected claims. They are well aware about all sort of rejections and are having tremendous knowledge to resolve them. Why the claims are rejected? It may be because;
- The claim fails to meet specific criteria of either the payer or X12 standardization.
- Errors in data entry, formatting issues, and missing information are present.
Let understand the common rejection reasons which restrict claims to be accepted and processed by the insurance companies. Some common reasons for claim rejections include:
- Information missing or invalid: Required information is missing, such as the patient’s name, date of birth, insurer member ID, etc. or information provided is invalid.
- Errors or incorrect codes: Information on the claim contains inadvertent errors, typos, or incorrect billing codes.
- Unreadable claim: The submitted claim is illegible or too unclear to accept and process by the insurance companies.
- Duplicate claim: Two or more claims are submitted for the same service date. May be the exact claim was already submitted and processed.
- Coordination of benefits issues: The order of insurers responsible for payment is unclear.
- Untimely claim: The claim was submitted after the filing deadline has passed.
- Invalid format: The claim was not submitted in the proper format required by particular payer.
Unlike denials, rejections do not require detailed explanations, but providers will need to follow-up to obtain and submit the correct information to get the claims paid.
Here are some key steps that can be taken to resolve rejections:
- Identifying gaps: The provider reviews the rejected claims and insurer notification to pinpoint missing or problematic information.
- Correcting errors: For claims rejected due to errors and inaccurate codes, the correct information has to be determined and rectified.
- Gathering information: Any missing documents, forms, clinical records, or supplementary claims data must be properly gathered.
- Resubmitting claims: Once identified issues have been addressed, the claim can be resubmitted to the insurer for re-processing.
To make practice smooth and eliminate future rejection, rejection team needs to come up with the plan. It includes, recording all the rejections scenario, identify appropriate solutions and pass on that information to the billing department to not to repeat the same errors. This way we can minimize rejections and improve the clean claim ratio.
Why Ingenious outsourcing is the best solution to reduce your rejected claims? Here are 10 proactive rejection preventions that we are taken to eliminate claim rejections.
Rejection vs Denial?
In the healthcare industry, there are two main ways that insurance companies respond when they decide not to pay a claim: denial and rejection. Both indicate the claim will not be paid, but there are some important differences between the two.
Claims Rejections are claims that do not meet specific data requirements or basic formatting that are rejected by insurance according to the guidelines set by the Centres for Medicare and Medicaid Services (CMS).
These rejected medical claims can’t be processed by the insurance companies as they were never actually received and entered into their computer systems. If the payer did not receive the claims, then they can’t be processed.
This type of claim can be resubmitted once the errors are corrected. These errors can be as simple as a transposed digit from the patient’s insurance ID number and can typically be corrected quickly.
Denied claims are altogether a different issue. Denied claims are defined as claims that were received and processed (adjudicated) by the payer and a negative determination was made. This type of claim cannot just be resubmitted. It must be researched in order to determine why the claim was denied so that you can write an appropriate appeal or reconsideration request.
Let’s go through the definitions of Denial and Rejection:
What is Claim Denial?
Claim denial happens after the claim has undergone adjudication process. Once the claim is accepted by the payer, it is thoroughly reviewed to match the patient’s benefits and the payer’s medical policies. If any discrepancies are found during this review, the claim may be denied. Denials can occur due to various reasons, including lack of coverage for the specific service provided, inaccurate coding or documentation, or exceeding policy limits.
Claim denial can have significant financial consequences for healthcare providers. A denied claim means that you will not receive payment for the services rendered, which can impact your revenue and cash flow. Moreover, denied claims often require additional resources and time to resolve the issues and resubmit the claim for reconsideration.
What is Claim Rejection?
Claim Rejection, on the other hand, occurs when a claim is rejected either at the clearinghouse level or by the payer. Clearinghouse rejection happens when your clearinghouse identifies errors or discrepancies in the claim data that need to be addressed before the claim can proceed for adjudication. These errors can range from simple formatting issues, such as an incorrect date of birth, to the presence of special characters in the wrong fields.
Clearinghouses often have scrubbers in place to ensure the claims they process are accurate and meet the payer’s requirements. By utilizing a clearinghouse, you can benefit from their scrubbing capabilities, which help catch errors and potential issues before the claim reaches the payer. This can significantly reduce the likelihood of claim rejection.
Payer rejection occurs when the claim has successfully passed through the clearinghouse and reaches the payer for adjudication. At this stage, the payer reviews the claim in detail, ensuring that it meets all the necessary criteria for processing. If the claim lacks required information or violates the payer’s guidelines, it may be rejected.