Revenue-cycle Management: Minimizing Denials and Maximizing Collections

The best way to minimize denials is to prevent them in the first place, by making sure that medical claims meet the requirements for clean claims. A clean claim is defined as a claim that meets the standards required by insurance carriers for payment on first submission. The components of a clean claim include (but are not limited to) conducting accurate demographic and insurance registration of patients, meeting timely filing deadlines, performing insurance verification, complying with utilization-management requirements (such as preauthorization of advanced imaging), and reconciliation of incompatible diagnosis and procedure codes. Accurate Registration Registering the patient with the correct demographics involves gathering such patient information as his or her full name, correct address, date of birth, email address, and telephone number. This task is important not just in preventing a denial, but in ensuring that subsequent claims are filed for the correct patient. The information collected at registration also is important in enabling the practice to reach the patient, should there be a need to do so. With the wrong demographic information, patients might not receive information on the status of their medical conditions, and they might not receive results from their medical exams. Without a current address, the practice will be unable to bill uninsured (self-pay) patients, resulting in potential revenue loss. While accurate demographic information could prevent unnecessary denials, the implication of inaccurate registration goes far beyond lost revenue. In performing the registration task, the practice must maintain a consistent pattern of registration to minimize the possibility of duplicating a patient’s record. A practice might decide always to register patients with middle initials or to include the apartment number in a patient’s address, but whatever pattern the practice chooses, it is important to maintain consistency. It is absolutely vital for a practice to verify the patient’s demographic information at every encounter. The verification process can be as simple as having the front-desk staff confirm a patient’s current address, telephone number, date of birth, and email address—or the process could involve having a preprinted form with the patient’s demographic information for the patient to confirm (or change, as necessary). Making sure that the practice has pertinent insurance information necessary for claims payment is another strategy that can minimize denials. This process entails gathering the patient’s insurance information (subscriber number, group number, and effective/expiration dates). For patients with two insurance carriers, the information on the secondary insurance must also be gathered and entered into the billing system. It is important for the registrar to designate the primary and secondary insurance carriers appropriately during the registration process (to prevent future claim denials due to coordination of benefits). The information on the primary and secondary carrier should be confirmed at every encounter to prevent claim denials, should the patient change or drop one of the two carriers. Coordination-of-benefits denial occurs when a claim that should have been filed with a primary insurance carrier is filed with a secondary carrier instead. When a claim is denied for coordination of benefits, the practice must then determine which of the carriers is primary. This could involve something as minor as switching the insurance priority in the billing system, or it might require contacting the patient to find out which insurance is primary. The insurance-registration process also requires the practice to identify a relationship between the patient and the subscriber (self, spouse, or parent/guardian) who is ultimately responsible for the medical bill. The identification of the relationship between a subscriber and the patient is important; it enables the practice to assign financial responsibility and follow up on unpaid claims. Timely Filing Denial for late filing occurs when a claim is submitted after the expiration of the time allowed for submission. Insurance carriers generally designate the time period; for Medicare in New York, New York, it is 12 months from date of service, with managed-care carriers’ requirements ranging from 45 to 180 days. Ideally, practices will submit their claims before filing deadlines, but denials for late filing could still occur when a claim is initially filed with the wrong insurance carrier. If the claim is not refiled with the correct insurance carrier on time, it might be denied for late filing. Another situation where late-filing denials could occur, despite the good intentions and diligent efforts of the practice, involves performing medical services in hospital settings. If the registration information sent by the hospital is incorrect, the process of verifying the information might be so lengthy as to compromise the filing deadline for some claims. A useful idea for minimizing bad data being fed into your billing system is to create a filter. This filter dumps new information on existing patients into a work queue for manual corroboration before the information is passed to your billing system. The idea is that the information in your billing system is constantly updated through your billing process and is probably more accurate than information coming from the hospital interface will be. It is important for practices to pay attention to the filing deadlines of their insurance carriers to prevent avoidable claim denials, as some claims denied for late filing could actually have been filed before the deadline. In fact, in my experience, about half of the claims denied for late filing are incorrectly denied, and such claims are subsequently paid on appeal. A practice need not automatically write off claims denied for late filing, but should take the time to go through the claims to determine whether these denials were warranted. Insurance Verification Validation of the insurance information provided by patients during appointment scheduling, to be effective, should be completed before the patient’s appointment. The verification process requires the practice to confirm the insurance information provided by patients with the insurance carrier, prior to claim submission. Patients might inadvertently provide the wrong insurance information during transition from one job to another; they might not know when insurance coverage from a previous employer terminates or when coverage from a new employer becomes effective. Unless verification is done, a practice might not be aware that a patient’s insurance coverage has terminated until the claim is submitted and denied. If verification is performed, however, the practice will be able to find out that coverage from the previous employer has terminated. At that point, the practice just needs to contact the patient for new insurance information. A patient could also inadvertently give the wrong insurance information after switching insurance coverage during a re-enrollment period. While mistakes do happen, it is incumbent upon the practice to verify insurance coverage. If, after the verification process, it is discovered that a patient has no insurance, the practice will need to switch the registration to indicate that this is a self-paying patient. In such instances, the practice will need to activate its self-payment policy, which might require that the patient be billed after the service—or could require payment in full at the time of service. Whatever the policy is, it is important for the policy to be communicated to the patient. At NYU Langone Medical Center (New York, New York), my preferred policy on self-paying patients is to require at least 50% payment at the time of service. This preference is rooted in the following principle: Since it is more difficult to collect accounts receivable from self-paying patients, it is important for collection to be made at the time of service. At the same time, a patient might not be able to pay the entire bill for advanced services such as MRI, CT, or PET. In such cases, the practice is not turning away patients (with the implication of lost revenue) and the practice is assured of collecting 50% of its standard charge. Preauthorization Requirements Meeting the requirement for preauthorization for high-end exams prevents avoidable denials for imaging practices. If a practice employs simple processes, there should be no reason to perform an exam without preauthorization. Preauthorization is required by many carriers for advanced imaging, such as CT, MRI, PET, and nuclear-medicine studies. Obtaining preauthorization usually involves a call made by the referring physician’s clerical staff to the utilization-management office of an insurance carrier to request the approval of an exam. The utilization coordinator (usually a nurse) will ask questions relating to the patient’s condition—and, if satisfied that the exam is needed, will grant the request. Once the referring physician’s office has the authorization, it is now ready to schedule the exam. The radiology department must request the insurance authorization for the exam before scheduling the exam (although some radiology departments will give a tentative appointment to a referring physician’s office, pending authorization). Once the imaging practice obtains approval, it should contact the insurance carrier to confirm the authorization. Claim denial for preauthorization failure usually occurs not because of the absence of approval, but because the approval provided could be for a different exam or for a different date of service—or the approval provided might have expired or could already have been used. Therefore, a practice must routinely confirm preauthorization with insurance carriers to prevent denials. This process works well for future appointments, but sometimes, a referring physician’s office requests a same-day exam for an urgent problem. In this case, imaging practices must evolve contingency plans to deal with same-day appointments. One method is to have a dedicated staff member responsible for validating authorizations for same-day appointments. In some instances, the utilization coordinator for an insurance carrier will deny an authorization request, if the information provided by the referring physician’s office is deemed insufficient to confirm the need for a high-end exam. In other cases, an authorization request might be kept pending for more rigorous scrutiny. In either case, the practice should inform the patient and give the patient the opportunity either to reschedule the exam or to pay for it. Incompatible Codes Denials resulting from the incorrect association of diagnosis codes and procedure codes constitute one area that is not well understood by imaging practices. Medicare has a list of published diagnosis codes payable for most procedure codes, and any deviation from the published list will result in denial. This practice puts the medical offices at a disadvantage, since exam coding cannot (and should not) be based solely on payable diagnosis codes. It is, therefore, important for imaging practices to educate their scheduling and front-desk staff to request additional information, when the diagnosis codes are not reimbursable, about signs and symptoms that might fall under payable categories. For instance, any diagnosis listed as ruling out a condition generally is not reimbursable by insurance carriers; when a patient presents with this type of diagnosis, staff members should request additional information about the signs and symptoms that brought the patient to the medical office in the first place. In some cases, these signs and symptoms could be reimbursable. While denials for incompatible diagnosis and procedure codes used to be the exclusive province of Medicare, other carriers have adopted similar measures. Many third-party insurance systems have editing capabilities that weed out incompatible diagnosis and procedure codes. A simple example would be a claim for an abdominal exam when the patient’s chief complaint is headache. Many carriers will deny such a claim, unless there is an established history of such an association (as seen in a patient with a history of metastatic cancer). Another example is a claim submitted for a male patient with a diagnosis limited to females, such as endometriosis. Such a claim is likely to be denied for incompatibility of diagnosis codes and procedure code. Similarly, a diagnosis of scrotal pain for a female patient will probably be denied. It is incumbent on imaging practices to obtain as much pertinent information as possible from patients or referring physicians’ offices to aid exam coding and subsequent payment. Another area of denial closely associated with incompatible diagnosis and procedure codes is the area of exam bundling. Bundling of exams occurs when an exam that could be billed using a single procedure code is billed using multiple codes. Claims for such exams are likely to be denied for bundling. An example would be a claim for a bilateral hip exam with a minimum of two views of each hip, including an anteroposterior view of the pelvis, submitted using the CPT® codes 73510LT (XR hip complete minimum of two views left), 73510RT (XR hip complete minimum of two views right), and 72170 (XR pelvis, one or two views). This is a classic example of bundling because the same exam can be billed using a single code, 73520. Another example would be billing a CT exam of the abdomen and pelvis, with and without contrast, using the old CPT codes 74170 (CT abdomen with/without contrast) and 72194 (CT pelvis with/without contrast), when a single CPT code of 74178 (CT abdomen/pelvis with/without contrast) would be sufficient for both exams. Begin at the Beginning It should be clear that the task of maximizing collections must start with the initial contact between a patient and an imaging practice. The appointment schedulers, who are usually the first point of contact, must be educated to request additional information for signs and symptoms when the presenting diagnosis is not payable. The registration staff must be trained in accurately registering the patient’s demographic and insurance information. The staff members verifying insurance and preauthorization must be diligent in their duties, and coders must be careful to avoid submitting claims with incompatible diagnosis codes. In addition, an imaging practice could adopt other strategies to maximize collections; a policy of collecting copayments, coinsurance, and deductibles at the time of service is one such strategy. Since it is generally understood that Medicare pays 80% of the Medicare Physician Fee Schedule, a practice should calculate the 20% coinsurance for each category of exam for Medicare patients without secondary insurance and inform them that the 20% coinsurance is expected at the time of service. The same method can be adopted for other carriers. Another avenue for maximizing collections is aggressively addressing claim edits from clearinghouses and denials from insurance carriers. Edits from clearinghouses—which usually fall into the areas of missing subscriber numbers, wrong dates of birth, mismatched gender, and similar errors—can be easily rectified and turned around within 24 to 48 hours. Denials from insurance carriers should be monitored for patterns; if there is a pattern, the practice should find the root causes of the denials and correct them, so that future claims will not be denied for the same reasons. Practices should make every effort to make it easy for patients to pay by accepting all forms of payment, including credit cards, debit cards, checks, cash, and online payments. A practice should never be in the position of not collecting payment at the time of service because it lacks a mechanism to do so. Felix Okhiria, MPA, MA, CCPO, CMPE, CPC, CHC, is director of business services, NYU Langone Medical Center, New York, New York.