How Behavioral Health Agencies Can Reduce Claim Denials

Make reducing claim denials your 2020 focus and learn how to solve some of the most common reasons for claims being denied.

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Reducing claim denials helps you and your clients

Behavioral health agencies that are financially healthy are better positioned to help their clients heal and stay healthy. One of the most cost effective ways to increase your agency’s financial health is by focusing on reducing your claim denial rate. You’ve already seen these patients and already billed the insurance payers for your services, shouldn’t you be paid as much as you can for your time?

Besides recouping payment from insurance providers, reducing your claim denial rate reduces the financial burden that might otherwise be passed onto your patients. To save them and yourself from more headaches, make reducing claim denials your 2020 focus. Continue reading to learn more about where to start and how to solve some of the most common reasons for claims being denied.

Most common claim denial reasons

It’s impossible to dive into reducing your claim denial rate without understanding some of the most common errors that cause insurance payers to deny the claim in the first place. Use this list to prioritize your appeal process and train your team to double check for these issues before submitting claims the first time around to reduce claim denials the first time.

Claim Denial Reason #1: Data Entry Errors

Most claims are denied for simple typos like misspelled names, transposed dates of birth, and incorrect genders checked. Make sure that data entry errors aren’t costing you tens of thousands of dollars a year.

How to Prevent

  • Utilize claim scrubbing software that can help check your patients’ demographic information to catch errors.
  • Train your staff to double check for typos.
  • Revisit your intake process to make sure demographic information is captured correctly the first time.

Claim Denial Reason #2: Ineligible or Non-Covered Services

Make sure your patients are covered by insurance and are still eligible for coverage. Double check with them at each visit to see if they have a new insurance card to avoid your claim being denied. Just because someone is covered by insurance doesn’t mean every service is covered so be sure to check the details on their plan as well.

How to Prevent

  • Check service dates and how many sessions they’ve had to see if they’re still covered by the payer.
  • Double check that your services are covered by your patient’s payer.

Claim Denial Reason #3: Missing Authorizations

Many claims are submitted without the proper authorizations. This doesn’t mean that you provided a service that is ineligible for coverage. Rather, the authorization either wasn’t obtained before the service was provided or the proper documentation is not linked or attached to the claim.

How to Prevent

  • Always obtain prior authorization to avoid unexpected denials and make sure it is properly recorded.

Claim Denial Reason #4: Coding Errors

Many claims are denied because of coding errors. Maybe there’s a typo or the code is not specific enough. Sometimes the code was correct, last year, but has since been updated in the national database. Be sure to catch coding errors to prevent denied claims.

How to Prevent

  • Always be as specific as possible when it comes to codes.
  • Make sure you’re not using outdated codes.
  • Double check that your modifiers are correct.

Claim Denial Reason #5: Billing or Filing Errors

Billing and filing errors account for a large portion of claim denials. These issues can arise from missed deadlines, missing information, and duplicate claims submitted. A careful eye to schedules and details can help prevent this common claim denial reason.

How to Prevent

  • Don’t be late when filing claims to avoid missing deadlines.
  • Make sure no information is missing.
  • Be sure you’re not submitting a duplicate claim.

Follow these 3 steps to reduce claim denials.

Tackling claim denials doesn’t need to be overwhelming. Follow these three main steps to take a huge step forward.

1) Engage your team.

Most of the incorrectly denied claims are a result of human error. Make sure your team understands the importance of attention to detail. Talk about billing and coding challenges that have arisen and as a team, identify and discuss the root causes. Adjust processes like new patient registration if need be to eliminate gaps that cause common errors. If necessary, schedule regular trainings to keep everyone up to date. Task someone to watch out for regulatory changes as these can also cause claim denial rates to uptick.

Beyond tasks that are directly related to claim submissions, check in regularly with your team. An unengaged staff member is far more likely to make mistakes than someone who loves their job. While not every day can be the greatest day ever for everyone, keep an eye on who seems to be truly invested versus just going through the motions. Don’t let bad habits or attitudes fester as they can infect your other team members. Address them upfront and try to get to the root of the problem. Maybe it’s a lack of training. Maybe it’s a lack of understanding how important these sometimes rote tasks really are. Whatever the issue is, be proactive about employee engagement.

Here are a few quick tips to help keep your team engaged:

  • Hold regular check-ins and updates about regulatory changes and other items that impact claims.
  • Have someone be assigned to keep an eye on regulatory changes.
  • Keep your team motivated and invested in their jobs through one-on-ones and trainings.
  • Review your intake processes.

2) Don’t be shy about appealing!

Every time a claim is denied and you think that it should be paid, appeal it. But before you send it back to the payer, make sure you make some changes to ensure it isn’t denied again. 

Here are a few quick tips to help you optimize the chances of getting your appeal approved:

  • Don’t send in an identical copy of your last claim.
  • Rework the entire claim before you send in the appeal.
  • Check typos, especially under the patient’s demographic information.
  • Double check that all codes are correct and errors are fixed.

3) Engage professional external billing services.

If this sounds overwhelming, don’t worry. External billing services, like our sister company BillCare, can help take the time-consuming process of billing and appeals off your hands. 

If you’re not sure if it makes financial sense to hire an external biller or keep your billing in house, try out this “True Cost of Billing” calculator to get a feel for what both options cost.

Keep these things in mind for a successful, long-term partnership if you use an external billing service:

  • Do they easily integrate with your existing EHR, or do they include an EHR in their services?
  • Do they have a track record of success for their current clients?
  • Who’s the team behind the numbers and can you envision working with them for many years?
  • ill they free up enough of your time so you can add in more revenue-generating hours?

The Bottom Line

Reducing claim denials is good for business. Period. It’s good for your agency’s bottom line. It’s good for your clients’ bank accounts and it’s good for everyone’s mental health. However, the process for reducing your claim denial rate can be daunting. Start with these steps and look for these root reasons to take away some of the stress. For an extra hand, calculate your claim denial rate with BillCare’s Claim Denial Rate Calculator.

Small steps can add up fast. Be patient with yourself and implement one change at a time to realize big savings for your agency and your clients.

Want to reduce your claims denial rate?

Schedule a demo and we’ll show you how Procentive will help you!

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