Everything You Must Know About Denied vs. Rejected Medical Claims

Most of us are used to being billed for a variety of services. You receive a bill outlining the work done, and you pay it. However, things can be exceptionally challenging when it comes to medical billing. Healthcare firms may simply not forward bills to the insurance company and receive payment. Moreover, hospital revenue cycle management is a complicated process. It involves pulling together information, i.e., patient demographics, medical diagnosis codes, and visit documentation.

After all the information is collected and compiled, it is sent to a clearinghouse. The clearinghouse is a gateway between healthcare providers and insurance companies that checks medical claims for errors before sending them to the payer.

The clearinghouse is a gateway between healthcare providers and insurance companies that checks medical claims for errors. The healthcare debt collection agency can send this to the payer. Also, the clearinghouse works to ensure that claims get rejected or denied.

Rejected medical claims

Claims that get rejected are actually submitted to a clearinghouse. However, they might not have met the specific data requirement or the basic format required. For example, typos, misspellings, terminated patient policy, or incorrect coding are some reasons behind the rejection.

Rejected claims get caught at the clearinghouse stage and may not be submitted to the payer; as a result, you don’t need to make it to the adjudication system. The claim hasn’t been submitted to the payer yet; it can be submitted once all errors are corrected and resubmitted.

Denied medical claims

Rejected claims come from an intermediary and denied medical claims come directly from the payer. A denial occurs due to a payer determining that they are not going to pay the claim. These denials can happen for several reasons, i.e., need for authorization, the claim was filed too late, and the payer didn’t feel the service was essential based on documentation provided.

If the claim gets denied, the solution is a bit more complex. You may not simply resubmit a claim and get it paid the second time around. This can turn out to be a duplicate claim. Instead, denied claims have to go through an appeal process where a provider asks the payer to review. Additional info can be more detailed notes regarding the service or situation and an explanation of the medical necessity of the services rendered.

Work out a plan for hospital revenue cycle management

While errors happen and rejections and denials are to be expected, occasionally, the number of them needs to be managed to ensure the financial viability of a practice. Hospital revenue cycle management saves from headaches by not having to submit rework or re submit claims. Basically, rejections and denials have a trickle-down effect until they finally hit the bottom line.

Understanding why claims get rejected or denied is the step to eliminating most of them, as they are usually caused by human error. Tasking a staff member to review all reports ensures they address denials and rejections. This can positively affect the bottom line both immediately and in the future.

Final Wrap

The hospital revenue cycle management has been partnering with healthcare organizations. The part of the RCM process is about ensuring the claims go out “clean” to the clearinghouses and eliminate as many denials and rejections as possible.

When you increase the clean claim submission rate, you can save time and money for the practitioner, and their staff can now concentrate on ensuring the best quality of care. Get in touch with the experts for issues regarding claim denials.

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