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How to Deal with Claim Denials and Appeals in ABA Billing

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In order to effectively run your clinic, it is vital to have a steady stream of revenue coming in to your practice. Medical Group Management Association (MGMA) estimated in 2015 that up to 65% of denied claims are never resubmitted.

Unfortunately, you could be leaving hundreds or thousands of dollars on the table if you do not have the proper processes set in place to appeal a denial. It’s essential that your billing team recognizes the importance of resubmitting denied claims efficiently, in a timely manner, and for the positive financial effects it can have on your ABA therapy practice.

At Amvik Solutions we understand why claims get rejected and how you can correct some of these simple mistakes. Facilitating communication among your staff, and ensuring that a keen eye is being placed on the claims during the billing process will help minimize rejections and improve your procedures.

Why are claims rejected/denied?

There is a bit of variation between rejected and denied claims, but ultimately what is important to understand is that you usually have an opportunity to correct the errors associated with the rejection or denial.

Rejected claims are defined as claims with invalid or missing data elements, thus, they are in a rejected status. Rejected claims are not considered to be “received” by the payor, and therefore, do not make it into the adjudication system.  There are several reasons why a claim can fail the billing process, including:

  • Billing validations
  • Clearinghouse validations
  • Payer validations

After a claim has been rejected a number of actions occur:

  • Rejected claims are sent back to the healthcare provider or EDI source through the payer’s claim processing system.
  • The provider is given an opportunity to correct and resubmit the claim – under a defined timeline.
  • A failure to re-submit on time means your practice can no longer be paid for the service. Make sure to notify your billing department about timeframes and the importance of resubmitting claims in a prompt manner.

Denied claims are considered “received” by the adjudication system of the payer, and because of this, require an appeal to modify the claim and provide the required additional documents. Claim denials fall into several categories:

Registration-related errors: These basic errors usually revolve around failure to accurately collect patient information and verify insurance coverage. Many claims denials are due to: data-entry mistakes, insurance ineligibility, and non-covered service.

Missing authorization: It is essential to obtain authorization for any scheduled services.

Coding errors: The complexity of the CPT and ICD coding systems often lead to many coding errors and denials. (i.e. missing modifiers, wrong procedure code, using outdated CPT codes, etc.)

Billing/filing errors: Claim denials also occur because of missing information, claims not filed on time, and duplicate claims.

Credentialing and provider issues: If your practice is not an in-network provider, then your patient’s insurance policy may not pay for out-of-network claims.

How can I fix a denied claim?

Even the best efforts sometimes fall short. While a claim being denied can create more work for you, it shouldn’t stop you from resolving the issue. If your billing claim has been denied, you will receive notification via ERA, EOB, or through a mailed letter. The recommended steps to effectively correct the issue include:

  • The insurer should provide you with a claims adjustment reason code (CARC) that explains the reason why the claim was denied.  Again, due to the complexity of coding system and the variation between insurer, you’ll likely need to do spend some time researching what the specific code means (especially when it is ambiguous) and to find out what additional critical information is required.
  • Direct route denials to the appropriate person in your billing team. They will want to:
    • Contact payers to clarify the reason for the denial.
    • Follow the instruction for correcting and resubmitting the claim.
    • Document the conversations and interactions they have with the insurer.

Even if after you have resubmitted a claim correctly, you are still being denied, you’ll want to appeal the claims within seven days of the payer’s final determination. Statistically speaking, you have a 67% chance of getting paid if you do so. However, those number begin to work against you, the longer you wait.

Denial do’s and dont’s include:

  • Don’t delay. Failing to resubmit within the payer’s time limit means you will not get paid for rendered services.
  • Do not automatically rebill for unpaid claims as this creates duplicate claims and duplicate denials that are time consuming to sort out.
  • Do build your case with a professional letter that clearly describes your case for appeal with all the related patient documentation, documentation of services, relevant medical literature, documentation of interactions with the payer in relation to the denial, the original filing claim, and copies of section from the CPT book that shows your billing department utilized the appropriate code.
  • Do reach out to the patient and provide them a copy of your appeal letter. Patients who are concerned that they will not be able to receive or pay for services are much more likely to call their insurer, which will consequently help improve your chances of an approved appeal.
  • Find expert help with Amvik Solutions.

What can my practice do to prevent denials?

If you are consistently seeing denials in your medical billing, you’ll need to address this by setting a denial management system in place. While you may not be able to completely eliminate them, you will hopefully reduce their volume, and thus focus less resources on correcting old claims.

Your staff should begin by building a library of tools to address denials as they receive them:

  • Payer rules and guidelines.
  • Template letters for specific appeal types.
  • Logs with specific error codes and what they mean.
  • Documents with specialty procedures to deal with specific types of appeals.

Aside from these assigned responsibilities for your billing department, as acting manager/owner of the practice, you should develop the necessary policies and procedures to better deal with denial management.

  • Develop an outline of procedures that ALL staff should take in order to establish proper intake and check-in, thorough documentation, and accurate billing practices.
  • Train your entire staff regularly and often. Your billers are not the only ones that affect the claims process – office staff, therapists, and management all play a role in correcting denials.
  • Have the right team by hiring the right people. A well grounded system can only produce so much if you don’t have the right employees implementing it. While terminating employees is never an easy choice, it may be the correct one for your company. Plus, if the right person is hired from the get-go, you won’t have to worry about firing an employee.
  • Monitor and analyze claim denials to help you identify where you have room for improvement. By categorizing your denials by type, calculating the percentage of denials, and studying sources to help prevent future denials, you can find patterns and get a better understanding of your practice’s revenue cycle performance.

Still need help with denials? Amvik Solutions is the perfect system to help you solve your shortcomings.

Our experienced team manages the billing process from beginning to end, helping to increase your monthly cash flow, so that you can do what you do best – providing quality ABA therapy.

Amvik Solutions provides a bevy of benefits including:

  • Electronic claim submissions whenever possible or paper claim submission as required.
  • Unpaid and denied claims follow up with insurance companies and funding sources.
  • Patient responsibility invoicing and follow up.
  • Claims follow up through collection agency
  • Client eligibility and benefit verification
  • Regional Center co-pay/co-insurance coordination
  • Comprehensive reporting – account ledger and claims denial report including an action trail documenting follow up correspondence with insurance companies and funding sources

Contact Amvik Solutions today at (805) 277-3392 X1002 to find out about more about the one source for all billing requirements.