Like all businesses, physician practices are sustained by getting paid for the work they perform. But healthcare providers are unique, not only in having to wait about 30 days from time of service to insurance reimbursement, but also in the sense that their “buyers” (health plans) can use a host of reasons to deny that payment.
On average, health plans deny 5–10 percent of the claims physician practices submit. 1 And even though the stakes keep getting higher, practices still don’t spend enough time on improving this aspect of revenue cycle management, says Ken Hertz, FACMPE, a principal consultant with the Medical Group Management Association (MGMA).
“Expenses are going up, reimbursements are going down — and leaving money on the table is not an option,” he says. “We’ve got to do a better job.” Despite the thousands of dollars lost by denied claims, data show practices rework fewer than half of them. 2
Hertz notes that reworking a claim is not the same as refiling. With the latter, the practice simply resubmits the claim to the payer without any changes, often without even looking at the reason for the denial. “It’s like the definition of insanity,” he says. “They keep doing the same exact thing and expecting different results.”
This habit is shockingly common, he says, and especially wasteful, considering that it costs about $25 to rework each denied claim.3
“The simplest, easiest thing any practice can do to avoid denials is to uniformly check eligibility for every patient encounter,"
- Eric Arnson, Senior VP & General Manager Change Healthcare
Before the Patient’s Visit
Denials can be triggered by mistakes that occur before, during, or after a patient’s visit. Improvements before patient encounters can result in preventing the bulk of denials before they ever reach payers, says Eric Arnson, a senior vice president and general manager with Change Healthcare. “The simplest, easiest thing any practice can do to avoid denials is to uniformly check eligibility for every patient encounter,” he says.
Practices should also check eligibility multiple times, including before the encounter and when the claim is filed. The reason this information needs to be verified — and verified again — is that eligibility on one date doesn’t necessarily apply to the date of service, which can occur if patients change jobs that provide their health insurance, says Penny Noyes, president and CEO of Health Business Navigators, a consulting firm that specializes in payer contracting and credentialing. “Most contracts have a very clear provision that even when you verify eligibility, there’s no guarantee of payment.”
It’s also essential to ensure the clinician providing care is contracted and credentialed with the exact insurance product the patient is covered by. “Most practices don’t even know precisely who they’re contracted with,” Noyes says. “They’re pretty confident they’re with the Blues, Aetna, et cetera, but they don’t know for sure if they’re in the HMO, PPO, Medicare Advantage, or private Medicaid products.”
To resolve this problem, Noyes recommends practices conduct a periodic review to confirm which products each clinician in the practice is linked to. It’s time well spent, regardless of how long it takes. In a small practice, this information can be gathered through one or two phone calls to each payer, she says.
These inquiries must be as specific as possible, she warns. Sometimes payer contracts are different from one clinician to another, or some physicians may be part of group contracts while others are individual. This research also includes verifying what contracts are tied to what tax ID numbers and National Provider Identifiers (NPIs). Multisite practices must also confirm their clinicians are credentialed at each location.
“Every once in a while, you just need to stop and find out what the payers have in their systems,” she says. Practices often mistakenly assume that payers have correct and thorough information, but you can’t know for sure. “Sometimes systems have gremlins that change things that were perfect six months ago,” Noyes jokes. “So periodically, you have to do a meticulous review.”
Current contract and credentialing information must then be relayed to the front desk. “They need to have a really solid list when they’re scheduling so they know what products the clinicians are participating in,” Noyes says. “If a new provider comes on board, the front desk needs to know which payers he or she is already credentialed with and which ones to hold off on because they don’t yet have an effective date.”
In addition, practices must confirm patients have received the necessary prior authorizations before providing any treatments that require them.
"It’s really important that billing staff understand the procedures the practice regularly does that require prior authorization and have a documented process by which to check for them routinely,” Arnson says.
During the Patient’s Visit
Submitting clean claims depends on accurate coding and adequate documentation. This can be a trouble spot for small practices, which may not have a certified coder on staff, Hertz says. Therefore, he encourages physicians to undergo coding training themselves — and for groups to have their charts audited by an outside expert every other year.
“There are a lot of groups that do internal auditing,” he says. “But that’s almost like having the wolf setting up the security system for the henhouse.” External auditors, on the other hand, not only provide objectivity, but also the opportunity for the practice to learn from their mistakes, he says.
Linda Girgis, MD, FAAP, agrees that physicians should become educated about coding. “You have to make the time for training, or you’re going to be losing money,” she says. “Especially now with ICD- 10, which is so complex, we want to be sure we’re actually coding for what we’re documenting.”