In our previous post, we discussed the first five most common medical coding and medical billing mistakes that cause claim denials. Today we will walk through the next five common reasons claims are denied.

6. Duplicate billing. Many times, a duplicate bill is the result of human error. However, duplicate bills can result from resubmitting a claim instead of a follow up or canceling a procedure or test but not removing it from the patient account. All claims processing systems contains criteria to evaluate all claims received for potential duplication. The claims are placed into two categories: exact duplicate or suspect duplicate. Due to the nature of the service, some claims may only appear to be duplicates. Proper coding of the service with the applicable condition codes or modifiers will identify the claim as a separate payable service, not a duplicate. Exact duplicate claims will contain the following:

  • HIC number
  • Provider number
  • From date of service
  • Through date of service
  • Type of service
  • Procedure code
  • Place of service
  • Billed amount

7. Up coding or unbundling. Up coding refers to intentionally using a higher-paying code on a claim to receive a higher reimbursement or billing a covered Medicare service in place of a not-covered service. Unbundling refers to submitting bills piecemeal to maximize reimbursement for tests or procedures that are required to be billed together.Upcoding refers to a provider’s use of CPT Codes to bill a health insurance payer (private, Medicaid or Medicare) for providing a higher-paying service than was performed. It is critical to understand that up coding is illegal. It is considered fraudulent practice used by providers who bill for additional services not documented and/or performed. Another common example of improper coding called “unbundling,” also known as “fragmentation.” Some health care providers seeking to increase profits will “unbundle” the tests and/or procedures and bill separately for each component of the group, which totals more than the special reimbursement rates. We must be aware that doing this by adding modifiers does not make this practice acceptable or legal. Medicare reimburses surgeries based on a package of care (global surgery package). When unbundling for the purpose of receiving additional payments although may seem profitable is illegal. It is very important to understand the usage of modifiers and their purpose in the role of coding. Surgeries are designated in the CMS Medicare Physician Fee Schedule Database (MPFSDB) with 0, 10, or 90 global days.

8. Further documentation requested to support medical necessity. Sometimes a payer requires medical records before it can adjudicate a claim. This may include the patient’s medical history, physical reports, physician consultation reports, discharge summaries, radiology reports and/or operative reports. Medicare and private payers recognize medical necessity as a deciding factor for claims payment and processing. Each payer might have its own definition but the outcome is the same. The best way to stay within the bounds of medical necessity is to think of each element of the history and physical exam as a separate procedure performed only if there is a clear medical reason to do so. The key is always to have documentation to support level of service should records be requested. No documentation equals no services performed. According to section 1862(a)(1)(A) of the Social Security Act, Medicare will not cover services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

9. Referral or prior authorization required. Some payers require you to obtain authorization or a referral from another physician prior to certain services or procedures being performed. There is a referral and prior authorization that is at times required and it is important to understand the difference. The primary care physician, who sends the patient to another healthcare provider for treatment or tests, issues a referral. The payer to perform the necessary service(s) issues a prior authorization. It is understood by carriers that obtaining prior authorization is still not a guarantee of payment. The submitted claim must still be 1) supported by medical necessity, 2) filed within the timely filing requirements, and 3) filed by the provider mentioned in the referral or authorization.

10. Services not covered/coverage terminated. Because insurance information can change at any time, it’s critical to verify eligibility every time services are provided. Make sure the patient’s coverage has not been terminated, their maximum benefit has not been met (for things like physical therapy and behavioral health) and the service you’re providing is covered by their plan. Understanding the patients plan and the services you are providing is important. Some plans the services have a cap although if following correct guidelines and supporting documentation these services will still be covered. Some examples of these are physical therapy, speech or occupational therapy and the use of correct modifiers. Coverage can change therefore it is important to verify and receive updated coverage from your patients. Ask them each time – they will forget to tell you. Again, a proactive approach is needed.

It is also very important to verify before doing procedures and services requiring precertification under the terms of a member’s plan. If authorization is required then it needs to be supplied when filing the claim.

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