The top 4 mistakes that lead to claims denials

Claims denials are one of the biggest challenges facing providers today. According to RevCycle Intelligence, from 2016 to 2021, the healthcare industry saw a 20% increase in claim denials.¹ That may seem bleak, but the same report found that 85% of those denied claims are avoidable.¹ In 2022, Kaiser Family Foundation released a report analyzing CMS data around claims denials from the 2020 plan year. Of claims denied for reasons other than a provider being out of network, relatively few were denied due to issues with preauthorization (10%), excluded services (16%), or medical necessity (2%).² A significant majority of denied claims (72%) were categorized as “all other reasons.”² So, what are those “other” reasons? What is the most common claim denial? There are several key factors that boost denials rates and prevent revenue cycle success:

• • Incomplete or inaccurate patient information
  • Healthcare plan changes
  • Claims submission errors
  • Untimely claims submissions

Let’s explore these top reasons for denied claims to help you avoid them – so you can increase your clean claims rate to capture fuller reimbursements and reduce A/R days.

Claims are denied for incomplete or inaccurate patient information

Claims are often denied because the patient’s name, address, or insurance information do not match the information on file with their payer. This type of denial is often the result of manual claims processes.

Without an automated system in place to verify patients’ information, billing staff are forced to manually check and re-check for inaccurate or incomplete information. This takes up a lot of time, and claim submissions may be delayed if the information is not readily available. With batch eligibility checks and automated claim edits, patient information can be verified and corrected without over-burdening billing staff.

Healthcare plan changes result in denied claims

Out-of-date insurance information is another big contributing factor for claim denials. Billers often encounter this challenge after patients change employers or when their insurance plans are updated during open enrollment. While providers can manually verify coverage every time a patient checks in for an appointment, this process takes time and can be frustrating for both the patient and billing staff. It saps front office staff time, while forcing the patient to spend more time filling out paperwork and waiting for verification before seeing a provider. Automated insurance checks can help ensure that the right payers are billed on the first pass, while streamlining the verification process.

Insurance companies deny claims with submission errors

Manual claims processes are not only time-consuming, but they can also lead to increased claims errors. When billing staff have to manually enter individual patient information multiple times, they are more likely to make (and miss) errors in claims submissions. Small mistakes, such as typos or misspelled names, can easily lead to denied claims. The right RCM software can automate these processes, freeing up billers’ time while increasing claims accuracy. More accurate claims then lead to fewer denials, a higher clean claims rate, and accelerated reimbursements.

Untimely claims submissions lead to a lot of claims denials

Claims are often denied due to missed submission deadlines. This is another challenge that comes with manual claims submission processes. When your claims management team is overwhelmed, they can easily fall behind in processing and submitting claims. This can lead to missed deadlines and denied claims. By automating batches of claims submissions, providers can free up billers to pursue higher-ROI tasks while ensuring that claims are always submitted on time.

The right technology can help you reduce claims errors and increase billing and claims efficiency. By automating claims submissions, edits, and reworks, you can decrease stress on your staff while increasing first-pass clean claims. At Inovalon, we help healthcare providers do more for their patients and their bottom line through automation that enhances efficiency and claims accuracy. To learn more about how you can decrease claim denials, connect with one of our subject matter experts today.

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