by Find-A-Code™
Feb 8th, 2024
Medical coders and billers work together to ensure that healthcare providers are paid for their services. Coders translate clinician notes into medical codes using typical code sets like let CPT and ICD-10. Meanwhile, medical billers take the work coders do and transform it into bills that are subsequently sent to payers. But there is one more spoke in the wheel, so to speak: claim denials management.
In a perfect world, every claim would be paid promptly and without issue. But the world is not perfect. There are times when payers reject or deny claims. Those claims go back to the healthcare provider for some sort of resolution. It is the responsibility of the claim denials management team to figure out what went wrong and correct it.
Rejections and Denials Are Different
Although claim rejections and denials are often confused as being the same, they are actually different. The AAPC explains that claim rejections occur "before the claim has been fully processed by the payer" due to something like incorrect or missing information. An error could be something very minor, yet something still picked up by a clearinghouse or claims scrubber.
On the other hand, a claim denial occurs after a claim has been fully processed by the payer. It is denied due to something like a lack of patient eligibility or determination that a particular procedure was not medically necessary.
When Claims Are Rejected or Denied
Claim denials management is essentially a strategy for addressing claims that have been rejected or denied. The AAPC says managing such claims involves a four-step process, as follows:
- Understand and Identify – The first step is to understand a returned claim to determine whether it has been rejected or denied. It is important to complete this first step as quickly as possible so that issues can be resolved before payment deadlines are reached.
- Analyze and Categorize – The next step is to categorize the claims based on reasons for rejection and denial. Categorizing helps the team better understand any systemic issues that could be leading to repeat rejections or denials.
- Correct and Resubmit – Following categorization, claims are corrected and resubmitted. Additional documentation may have to be submitted along with the corrected claim. An occasional appeal might also be in order.
- Prevent Future Denials – Finally, the team works with medical coders and billers to prevent future denials. This could mean modifying coding and billing practices, offering coders and billers additional training, etc.
The ultimate goal of claim denials management is to minimize both rejections and denials as much as possible. Ideally, the team should ultimately work itself out of a job. But given the complicated nature of both medical coding and billing, this is not practically possible.
Keeping Revenue Streams Flowing
Proper claim denials management impacts the bottom line by keeping revenue streams flowing. As previously stated, there are deadlines involved with reimbursements for medical care. Payers are required by law to issue reimbursements in a timely manner. Therefore, they also have their own policies regarding deadlines for submitting original and corrected claims.
When all goes as it should, returned claims are corrected, resubmitted, and paid on time. Revenue continues to flow, and the provider is happy. But when rejected and denied claims go unpaid, the provider loses revenue.
Medical coders and billers do most of the heavy lifting that ensures healthcare providers get paid. But when claims are rejected or denied, which happens more frequently than most providers would like, it is up to the claim denials management team to fix things. Their work makes for a healthier bottom line through consistent revenue streams.
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