Coordination of benefits – Claims for patients covered by more than one health plan can result in delays and even denials until the patient’s coordination of benefits are updated.Duplicate claims – Claims submitted for a single encounter on the same day by the same provider for the same patient for the same service item.Provider out of network – The payer may deny all or part of the claim if the services are performed by an out-of-network provider.Procedure not covered by payer – This is generally easy to avoid by simply reviewing a patient’s plan or calling their insurer before the claim is submitted.Medical necessity requirements not met – A medically unnecessary healthcare service is not covered by the policy, and the payer disagrees with the physician about what services you need for your condition.Missing or incorrect information – This can be anything from a blank field (e.g., Social Security number or demographic information) or incorrect plan code, to technical errors like a missing modifier.Prior authorization – In the event that prior authorization is not obtained prior to the service being performed, a claim may be denied.The key is understanding the most common reasons claims get kicked back, according to the MGMA 9: To mitigate the financial damage of denied claims, the best defense is to prevent them from happening in the first place. 8 Success-and lower recovery costs-requires a strategic approach designed to ensure the process aligns with payer requirements. In fact, as many as two-thirds of rejected claims are recoverable. The good news is that denial does not automatically relegate claims to the write-off bin.
5 Adding to the hit on the bottom line is the cost to rework or appeal denials, which averages $25 per claim for practices and a whopping $181 per claim for hospitals. 4 Industry averages report that nearly 20 percent of all claims are denied, and as many as 60 percent of returned claims are never resubmitted. 3 According to a Medical Group Management Association (MGMA) Stat poll, on the practice side, survey respondents reported an average increase in denials of 17 percent in 2021 alone.
1,2įor hospitals, denial rates are on the rise, increasing more than 20 percent over the past five years, with average claims denial rates reaching 10 percent or more.
Wage inflation, rising costs, lagging patient and service volume, and pandemic-driven uncertainty continue to put enormous pressure on healthcare organizations’ bottom lines-a situation exacerbated by unresolved claims denials representing an average annual loss of $5 million for hospitals representing up to 5 percent of net patient revenue.
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