When it comes to medical billing and coding, every healthcare services provider is afraid of rejection. To prevent rejections, you should understand the basics of why medical billing and coding fail and what types of rejections are there. Additionally, you should know how to handle these rejections as soon as possible. Come with me to explore the types of rejections in medical billing.
Major Types of Claim Rejections
There are two major types of rejections, soft and hard. In some cases, the rejections can be easily handled by the medical coders and billers. However, there can be several issues that come up while managing the claim rejections. Let’s break down each rejection in detail.
Soft Rejection
These rejections are not tough to deal with because there are several ways to correct the soft rejections. You can acquire various techniques and get help from experts to handle the soft rejections. These rejections can be easily corrected by the coders and billers because they are temporary ones. Here are some common soft claim rejection reasons.
- Missing information about the patient such as the name, date of birth, and insurance details.
- Incorrect diagnosis code is used by the coders while encrypting the information of the patient.
- If there are missing or outdated modifiers, the claim can be rejected by the insurance company.
- If there are typographical errors in the claim report, they can be corrected.
Hard Rejections
Opposite to the soft ones, the hard rejections are the ones that you cannot correct. These rejections are highly sensitive and can cause a permanent rejection of the claim. To solve the complex rejections, insurance companies demand additional information that can be used to verify the details of the patient as well as additional documents. Here are the reasons for hard rejections.
- If the services are not covered by the insurance plan, the claim can be rejected.
- If there is a lack of prior authorization, the claim can be rejected.
- If there is a duplicate claim submission, the claim can be rejected.
- If the services are billed outside the policy’s timeframe, the claim can be rejected.
Common Reasons for Rejection
There can be several reasons for claim rejections including the incomplete information of the patient. If the patient information does not lead to accuracy, the insurance company will reject your application. Additionally, the information can be rejected in case the codes are invalid or if there is a lack of prior authorization. All the common rejections are explained below.
1. Incomplete or Incorrect Patient Information
A rejection claim can result from any errors in the patient’s demographic or insurance details. This includes misspelled names, the wrong insurance ID number, or missing dates of birth.
2. Invalid or Outdated CPT and ICD-10 Codes
Any billing codes that are already outdated or incorrect receive immediate rejection. Regular updates and coding audit helps you to ensure compliance with your current standards.
3. Lack of Prior Authorization
And some procedures and treatments do need insurance approval before they take place. If this authorization is not obtained, claims will be rejected.
4. Duplicate Claims
Continuous submission of the same claim may lead to rejection. It is possible to prevent this issue by using proper claim tracking.
5. Mismatched Information
Rejected claims occur when the information on file with the insurance provider does not match up with the submitted claim details. Risk mitigation can be achieved by ensuring accurate data entry.
How to Reduce the Claim Rejection in Medical Billing?
Reducing the claim rejection is not a tough job; however, it may take time to understand the cause of rejection. If a healthcare provider repeats the same mistake again and again, he can be banned by the insurance company. Anyhow, here are tips to reduce the rejection in medical billing.
1. Verify Patient Information Before Submission
Before we pay claims to payers ensure all demographic and insurance details are accurate. This can be done through the use of electronic verification tools.
2. Use Updated Medical Codes
Billing software is updated regularly to encompass the most current CPT, ICD-10, and HCPCS codes. Outdated codes cause automatic rejection.
3. Obtain Prior Authorizations
Check the authorizations required before performing a service that needs pre-approval. This reduces unnecessary denials.
4. Implement Automated Claim Scrubbing Tools
Tools that detect errors before claim submission can result in greater chances of claim acceptance. The use of these tools helps in minimizing soft rejections.
5. Train Your Medical Billing Team
Accuracy of claim submission means a lot, if you have a well-trained billing team, then they can reduce rejection to a great extent. Workshops and training to improve new billing regulations are held regularly.
6. Monitor and Analyze Rejection Trends
With an understanding of the common claim rejection reasons, the billing teams can come up with strategies to address recurring issues, resulting in an increase in the claim acceptance rate.
7. Establish Clear Communication with Payers
Being in strong relationships with insurance companies helps the billing team understand the policies and clear rejections faster.
Call For Action
If you want error-free billing and coding services, you should look no further than the Med Brigade, one of the top billing and coding services providers. We have been providing services for years. That’s why our claim rejection ratio is 0 and the claim acceptance ratio is 100%. Whether it is soft claim rejection or hard claim rejection, you should not stress about it. Partner with Med Brigade and say goodbye to claim rejections.
Final Thoughts
A key to reducing losses on revenue and making medical billing more efficient is understanding the different types of levels of rejections in medical billing. Healthcare providers who proactively address “claim rejection reasons” and follow best practices can remove inefficiencies from collection processes in order to shore up their financial health.
An optimized billing process reduces rejections and promptly facilitates the approval of claims. Optimize your billing workflow and keep yourself ahead of rejections due to insurance policies.