Medical billing is a vital part of healthcare administration and can be especially challenging for smaller medical businesses such as independent labs and specialist practices. Accurate and timely billing is crucial for practitioners to receive payment for their services, keep their offices running smoothly, and provide high-quality care to patients.
Insurance companies and government payers often deny or reject claims, leaving practitioners unsure if they are receiving fair compensation. Underpayment in medical billing is a common problem that can significantly impact a medical business’s financial health. Unfortunately, there’s no way around it—denial management in healthcare is an unavoidable part of the billing process.
When we are talking about the claim cycle in medical billing, it is important to differentiate between denied and underpaid insurance claims. “Claim denial” refers to when an insurer or payer refuses to pay for a service or treatment. This is often due to billing errors, missing documentation, or services that are not covered by the insurance policy.
“Underpayment” is when the payer reimburses the practitioner for less than the billed amount for a service or treatment. There are many reasons underpayment can occur.
There are several steps that can be taken in the billing and claims management process to reduce denied claims.
Regularly Review Fee Schedules: As fee schedules vary between insurers, it’s essential to stay up to date with any changes and ensure that you are billing according to the correct fee schedule.
Monitor Coding Accuracy: Ensure that your medical coders are knowledgeable and experienced in the latest coding guidelines. Regularly reviewing all claims that have problems can help identify any coding errors early on and avoid future underpaid claims when the uncorrected error is repeated.
Verify Insurance Coverage: Verify patients’ insurance coverage before providing any particular services. Some payers require pre-authorization and will refuse payment for a covered service if it was not obtained prior to treatment.
Implement a Claims Tracking System: A claims tracking system can help practitioners monitor the status of their claims and identify any underpaid claims. A good tracking system will allow you to track claim submissions, rejections, and payments, ensuring that you can quickly identify any discrepancies and take action. The system must include follow-up on appeals.
Stay Up-to-Date on Insurance Policies: Regularly reviewing policies can help practitioners identify changes in reimbursement rates, coverage, and coding requirements. Each insurer will make different changes, so it is important to review the policies for each one that you work with.
Use Automated Solutions: Automated solutions, such as billing software and electronic health records (EHRs), can help practitioners streamline their billing processes and reduce the risk of underpaid claims. The more your system can automate coding and billing, the less risk of coding errors you’ll have. It is much easier for software to keep track of all the correct fee schedules and submission requirements than for a human to try and keep up with all the details.
Continually Train Your Staff: Even if you hire certified billers, you have to continually update them on insurance coverage and changes in billing practices to reduce the risk of underpaid claims. It’s important to ensure that your staff is knowledgeable and up-to-date on the latest codes, guidelines, and insurance policies.
Monitoring and tracking your claims is crucial for identifying underpaid claims and taking corrective action. Some of the actions we have found to be most effective are:
Use a claims tracking system: As previously mentioned, a claims tracking system can help practitioners monitor the status of their claims and identify any discrepancies. These systems can alert practitioners to any rejected or underpaid claims, allowing them to take prompt action.
Review Reports: Regularly reviewing billing reports can help practitioners identify any underpaid claims. Reports can provide valuable insights into reimbursement rates, coding accuracy, and insurance coverage.
Follow up on Claims: Following up on unpaid or underpaid claims can help practitioners identify any issues with the billing process or insurer policies. Practitioners can contact insurers to verify any discrepancies or negotiate for fair reimbursement rates.
Providers need to appeal underpaid claims to receive fair compensation for their services. You will need to figure out what the problem was and correct it. That can be time-consuming, so many claims get abandoned when there is a denial. You should proactively appeal any underpayment that you disagree with. If a service is not covered, the payer will not pay you, but the following are common occurrences that you should appeal.
Accurate and timely medical billing is crucial for medical businesses to receive fair compensation. Underpaid claims can significantly impact a medical business’s financial health, and it’s essential to identify and address them promptly. Any medical billing company should be willing to take responsibility for following up on underpaid claims to maximize revenue for their clients.
Implementing best practices such as regularly reviewing fee schedules, monitoring coding accuracy, and appealing underpaid claims can help reduce revenue loss. Outsourcing medical billing provides many benefits, including increased efficiency, cash flow, and access to billing experts.
Medcare MSO has developed a system for tracking and managing claims that has consistently resulted in increased revenue for our clients. Our experienced billing staff follows up on all unpaid and underpaid claims, relieving clients from all the hassle of interpreting denial codes and negotiating with payers. If you would like to find out how much we can increase your revenue, give us a call today at 800-640-6409. We are offering a free AR analysis to show you just where you may be losing money that we can routinely recover.
