Don’t Overlook “Hidden” Denials

Most providers and billing professionals understand the importance of tracking a practice’s “denied” claims—those for which insurers refuse to pay a dime. But there are other “hidden denials” that you also should be monitoring to prevent a slower, less obvious revenue drain.

I recently ran a report sampling more than five million claims and remits from late 2009, and found that about 7% were denied outright by payers. This is what I would call a traditional “denial” rate. Payers didn’t reimburse for any of the services on these claims.

A closer look at the denied 7% reveals that they cut across all types of diagnoses, from routine exams and vaccinations to cataracts and hypertension.

The most common reasons given by payers for outright denials include:
• “claim is already adjudicated;”
• “the charges exceed contract;” and
• “claim lacks information needed for adjudication.”

Most providers and billing professionals understand the importance of tracking a practice’s “denied” claims—those for which insurers refuse to pay a dime. But there are other “hidden denials” that you also should be monitoring to prevent a slower, less obvious revenue drain.

I recently ran a report sampling more than five million claims and remits from late 2009, and found that about 7% were denied outright by payers. This is what I would call a traditional “denial” rate. Payers didn’t reimburse for any of the services on these claims.

A closer look at the denied 7% reveals that they cut across all types of diagnoses, from routine exams and vaccinations to cataracts and hypertension.

The most common reasons given by payers for outright denials include:
• “claim is already adjudicated;”
• “the charges exceed contract;” and
• “claim lacks information needed for adjudication.”

But it’s important to remember there is more to the denials story.

As I drilled down further into the 93% of claims that were paid, I saw that about 12% of their service lines were not paid and were not sent to patient responsibility. In other words, these claims did not appear as denials because at least one service line on each of them was paid. But that certainly doesn’t mean these claims were paid in full. Some of the individual service lines were paid $0.

These are the hidden denials that I call “service denials,” and it’s vital that you keep track of these, too!

These service denials often appear to be very common services that would seem, on the surface, to be payable all the time. According to my report, the top 10 CPT codes for service denials were: established office/outpatient E/M codes 99212-99214; subsequent hospital E/M code 99232; routine venipuncture code 36415; immunization administration code 90471; flu vaccine code 90658; complete CBC code 85025; complete electrocardiogram code 93000; and specimen handling code 99000.

Taking an even deeper dive, these service denials cannot all be written off as likely due to bundling edits or coverage issues. In fact, many of the payer reasons given for service denials are coding and billing items that you can work on:
• procedure/modifier mismatch;
• procedure/place of service mismatch;
• diagnosis and/or procedure inconsistent with patient age; and
• charges exceed fee schedule.

In conclusion: It’s not enough to simply track your “denials.” Make sure your practice tracks “service denials” as well.