The 1, 2, 3 Punch for
Defeating ASC Claim Denials
By Caryl Serbin, RN, BSN, LHRM
Claim denials are the bane of an ambulatory surgery center's (ASC) revenue cycle team and contributing factor to higher accounts receivable (A/R) totals. A/R provides a snapshot of monies owed (asset). If the A/R balance is increasing and/or aging, it may indicate an issue that needs to be investigated.
Identifying and tracking types of denials are paramount to educating your staff on how to prevent and/or respond to claim rejections and to pinpointing areas that are causing delayed reimbursement. The sooner you can address and decrease denials, the better as investigating delayed or denied reimbursement costs your ASC valuable man-hours that could be put to better use.
The first step in tracking denials is utilizing a denial log. This can be a software-generated or a physical (e.g., spreadsheet) denial log. This allows your revenue cycle team to detect errors and correct them before they become a troublesome trend. Most ASC-specific software platforms can track denials by posting the appropriate transaction/ledger code (denial category) to the individual patient. The software can then generate reports showing denials by category.
ASC Denial-Defeating Recommendations
Once you begin tracking denials, then it's a matter of understanding what you need to do to reduce the frequency of denials and make them the exception, not the norm. The following denial-defeating recommendations are divided into three sections: denial identification, denial prevention and denial response. This information is intended to provide your staff with the appropriate information needed to contend with claim denials.
Section I: Denial Identification
Listed below are several areas of the reimbursement cycle where denials can occur, all of which delay reimbursement. The following denial categories provides your business office staff with the ability to identify and prevent most of these before they occur (which will be discussed in the next section).
Returned claims — Claims returned for incorrect payer identification number, or if claim sent by mail, returned because sent to wrong claim office.
Incorrect demographic (patient) identification — According to Medicare, the most common reasons for denials are misspelling the patient's name, incorrect date of birth or invalid subscriber name.
Incorrect insurance identification number/policy number — Medicare also lists this as a common error on claims.
No authorization — Some insurance companies require ASCs to obtain an authorization prior to surgery. This authorization is typically obtained from the scheduling physician's office.
Expired/no insurance coverage— Reasons for this denial include the patient has allowed coverage to lapse and family member having surgery is not covered on the insurance policy presented.
Coding errors — Errors may include improper use of modifiers, bundling and/or unbundling of procedures and diagnosis code not appropriate for procedure.
Technical/claim error — Insurance carriers may have different requirements as to how information is reported on claim forms.
Timely filing — In most states, there is a proscribed length of time for an insurance carrier to pay a claim (i.e., timely filing regulations). The insurance carrier may also have specific time constraints for filing a claim listed in your contract.
Medical necessity — The Primary reason for this denial is that the procedure performed is not supported by reported diagnosis. Insurance carriers may also deem that a procedure does not meet their medical policy criteria.
Non-covered procedure — Reasons for this denial include CPT code(s) not included in carrier's approved list, non-ASC procedure, inpatient procedure only, and pre-existing condition.
Coordination of benefits (COB) — Coordination of benefits allow plans to determine their respective payment responsibilities (i.e., determine which insurance plan has the
primary payment responsibility and the extent to which the other plans will contribute when an individual is covered by more than one plan).Request for Additional Information — delays may also be due to carriers requesting additional supporting information such as operative notes, implant invoices, patient history and physical.
Section II: Denial Prevention
Prevention of denials is the responsibility of the entire business office staff. Beginning with the scheduler, it is imperative to verify the following with the surgeon's office:
demographic and insurance information
CPT code(s) for the planned procedures and if they are covered in the ASC diagnosis
insurance authorization, if applicable. Most insurance companies require that the surgeon's office obtain the authorization for both the surgeon and the ASC.
The scheduling information is used by the insurance verification representative when contacting the patient's insurance carrier. This interaction should lead to the representative obtaining the following:
accuracy of demographic and insurance information
coverage is viable for date of surgery and specific family member
coverage specifics (patient's financial responsibility (e.g., deductible, copayment, coinsurance))
pre-existing conditions, if indicated
confirmation that planned CPT(s) are covered by patient's plan
authorization, if required
Verification of patient information is obtained by the front office receptionist on the day of surgery. The receptionist is responsible for:
verifying the demographic information with the patient and making any necessary changes
checking that the patient's insurance identification card matches the information in the software program
scanning the patient's insurance identification card (front and back)
Following the procedure, the coder is responsible for:
obtaining the operative report
verifying that all documented procedures are coded
accurate coding of procedure(s) described in the body of the operative note
determining that diagnosis codes are valid for procedures performed
applying modifiers, where indicated
providing necessary additional information if indicated
listing procedures in order, per the payer's guidelines
rechecking coding for accuracy (bundling, unbundling, modifiers)
In addition to the above listed safeguards against errors, at the time of claim submission, the billing specialist should reaffirm the accuracy of:
patient's demographic information
patient's insurance information
coding specifics (e.g., modifiers, diagnosis codes, procedure code ordering, implant information)
carrier-specific form requirements
In addition, if specific carriers (e.g., workers' compensation) require additional information (e.g., operative note, implant invoice), include this information with original claim to help avoid delays.
Section III: Denial Response
ASC claim denials are usually received by the payment poster. This is where the denial is entered into the denial log (usually digital or spreadsheet). It is imperative that this denial information is assigned to the specific patient.
Denials should be addressed immediately. The payment poster is responsible for initiating appeals. In-house errors resulting in incorrect or no reimbursement should be assigned as follows:
incorrect or missing patient identification — billing specialist
Incorrect or missing insurance identification — billing specialist
coding error — coder
lack of authorization — insurance verification specialist
non-covered procedure — insurance verification specialist/scheduler
medical necessity — billing specialist/coder/surgeon
coordination of benefits — insurance verification specialist
claim form error — billing specialist
timely filing — billing specialist/coder/surgeon (no operative note)
ASC Claims Denials Quick Tips
The following are recommendations that can help your ASC more effectively address denials:
Denials that can be corrected easily should be done by telephone with the insurance company representative.
Denials that need additional information can often be remedied quickly and returned via online portal or mail.
Denials should be distributed to the appropriate revenue cycle department to be addressed promptly.
Timely filing, medical necessity, and no authorization denials must be reviewed to determine the root cause. Education may need to be provided to surgeon, surgeon's office, and/or billing staff. These denials would only be appealed if the ASC can prove that: a) the claim was filed within the appropriate time period; b) authorization was obtained or unnecessary; or c) the claim fits the payer guidelines for medical necessity.
Non-covered or non-ASC codes should be adjusted and reviewed. These codes may be appropriate to the primary procedure. If so, this indicates the need for further education for the scheduling staff to prevent recurrence.
Appeal process should be started immediately by appropriate team member and carried to the full extent of the allowed appeal process.
Denials should be addressed by a member of management with the appropriate team member. If denial types are frequent, additional education may be indicated.
Our Appeal to ASCs: Prioritize Reduction of Denials
When not prevented up front through the submission of clean claims, denials require multiple man-hours to identify, correct and pursue appropriate appeals. Revenue cycle team members spend valuable time and resources chasing denial reimbursement that could be better spent on keeping current on claim submission. So much time spent on denials and appeals can result in a "catch-up" form of revenue cycle management (RCM) that inevitably negatively affects cash flow, staff and physician satisfaction, and profitability.
Surgery Centers that outsource their revenue cycle management to Serbin Medical Billing and its team with unmatched ASC billing experience find their number of denials greatly reduced and accurate reimbursement received promptly, thus resulting in a reliable cash flow. Reach out to Serbin Medical Billing today to learn how we can deliver the RCM results your ASC is looking for.