An Analysis of Key Coding Denial Challenges in Medical Billing

Medical Billing When it comes to RCM, there are a various steps like appointment scheduling, insurance verification, medical coding, charge entry, claim checking, payment processing, denial management, AR follow ups, patient statements etc.

Medical billing is a quite complex process involving submitting claims and staying updated with the changing regulations. However, denials do occur, and healthcare providers should manage them properly. In fact, nearly one in three healthcare organizations experience minimum 10% of denied claims.

Denied claims will increase administrative costs, making effective denial management crucial. To minimize the financial impact and improve reimbursement cycles, healthcare providers and billing professionals need to understand the root causes of claim denials. This read will walk you through the common coding denial challenges in medical billing processes.

Incorrect or Missing CPT Codes

Current Procedural Terminology codes are generally used to denote the medical services provided by healthcare professionals. These codes must be accurate and specific to the services offered. Denials often occur due to:

Incomplete coding:

Failing to report all aspects of the procedure, like whether it was done on a single or multiple locations, can result in underpayment or nonpayment.

Modifiers:

Modifiers often provide additional information about the procedure. These will cover the circumstances under which the procedure was performed. Let us take modifier 59. This is generally used to denote a distinct procedural service. Incorrect usage and sometimes omitting these modifiers can cause major delays and denials.

Diagnosis Code Issues

The International Classification of Diseases codes provide detailed information about the patient's diagnosis. These codes must align with the CPT codes to clarify the medical necessity of the procedure. Common issues include:

A mismatch between diagnosis and procedure codes:

When a diagnosis code does not support the procedure code, the claim may be rejected. A surgical procedure might require a certain type of diagnosis to be eligible for reimbursement. If the diagnosis code is not justifying the procedure, it might result in a denial.

Unspecified codes:

Using unspecified diagnosis codes like unspecified abdominal pain is not right. These codes may trigger denials, especially if more specific codes are available.

Lack of specificity:

The ICD-10 system will be updated often to become more detailed. So, it is important to use the specific code available. Using a general code for hypertension rather than the specific type of hypertension may lead to issues with claims.

Payment Delay and Denial Due to Coding Errors

Coding errors can significantly delay payments. The claims will either be rejected immediately or delayed for investigation. These might be due to the following:

Lack of Supporting Documentation:

If the procedure code does not match the medical documentation, the payer may deny the claim. The provider might not include enough detail about the patient's condition. So, the payer may question the medical necessity of the procedure. This will cause unnecessary delay.

Duplicate Claims:

Sometimes, duplicate CPT codes and diagnosis codes will be submitted mistakenly. This will also lead to denials. If a payer detects a claim that has already been processed, it might deny the new claim as a duplicate.

Payer Specific Rules:

Different insurance companies have varying rules and guidelines regarding coding. If a provider does not follow a specific payer coding requirements, even if the codes are correct, they can face payment delays.

Time Constraints and Administrative Burden

Billing and coding professionals often face time constraints, especially when dealing with a large volume of claims. Pressure to meet deadlines can lead to inaccurate coding. Rushed or incomplete coding can cause errors, increasing the chances of claim denials.

When coding errors are frequent, billing staff has to spend more time appealing denials and resubmitting claims, increasing administrative costs and further delaying payments.

Best practices to prevent claim denials

Always verify insurance coverage, benefits, and policy details before scheduling the appointment.
Detailed and accurate clinical records, including physician notes, lab results, and treatment plans, are important to support the necessity of the procedures and services provided.
Get pre-approval for procedures that require prior authorization, particularly for high-cost treatments and specialized procedures.
Use advanced billing software that can automatically detect errors and inconsistencies before submission. Using technology to track claim statuses helps monitor potential issues, allowing for quicker resolution.

Bottom line

Understanding the common denials and knowing the practices to approach them will help healthcare providers navigate the medical billing process easily. Are coding denials affecting your revenue cycle? ACP Billing Services specializes in addressing key coding denial challenges in medical billing. With an experienced team ensuring accurate and up-to-date coding practices, ACP reduces errors that often lead to claim rejections. By partnering with ACP, you can improve your claim approval rates and update your billing process to enhance your cash flow.