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Six Tips for Handling Insurance Claim Denials

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Even professionals who take precautions to avoid insurance payout traps sometimes face claim denials. Handling denied insurance claims can be a frustrating, time-consuming, and complicated process for practicing psychologists and their administrative staff. Knowing some basic strategies for resolving claim denials can save practitioners time and improve your practice’s cash flow. Here are some basic tips for handling claim denials.

  1. Carefully review all notifications related to the claim sounds obvious, but it is one of the most important steps in claims processing. Whenever you receive a payment notice, explanation of benefits, or other notice from an insurance company regarding a claim, review it carefully. the notice must state whether the claim was paid in full, delayed, partially paid, or denied. if the claim is determined to be “impure” or contested, follow the carrier’s instructions for resubmitting the claim along with any missing or corrected information. (Tip: For tips on filing clean claims, read “Insurance Claims 101: How to Avoid Common Payment Mistakes.”) if the claim is partially paid or payment is denied, the notice must specify the reasons and describe the specific procedures and documentation required to resubmit the claim or file an appeal. if the notification is not clear, call the carrier for more information. In addition to getting a stated reason to deny a claim, you may find that the claim was improperly adjudicated due to a clerical error on the part of the payer. You may also find that your filing procedures don’t match company requirements, but you can make some simple adjustments to your procedures to expedite future claim filings.

  2. be persistent if your resubmitted claim is denied and you believe the denial was improper, you may appeal the decision in accordance with the insurance company’s guidelines. make sure you know exactly what information you need to send with your appeal. Please note that appeal procedures may vary by insurance carrier and state law. Your appeal must include an explanation of your request for reconsideration, along with any necessary supporting documentation, such as a copy of the claim in question and copies of previous communications to the company on the matter. If your claim is denied on the grounds of “medical necessity,” you may be required to submit additional information to demonstrate necessity. Please note that it is critical to comply with your obligations under the Health Insurance Portability and Accountability Act (HIPAA) to protect psychotherapy notes and provide only the “minimum necessary” information. You may need to refile or file an appeal more than once to reverse a company’s decision, but don’t give up. your persistence can show the insurance company that you are serious about resolving the problem and paying.

  3. Don’t delay It’s important to file and resubmit claims in a timely manner, within the time frame specified by the company or applicable laws in your state. otherwise, the claim may be adjudicated based solely on the information you already provided, or any request for reconsideration or appeal may be denied as time-barred.

  4. Understand the appeals process When you submit an appeal, make sure you are familiar with the company’s appeals process. When you know your carrier’s policies, you’re in a better position to respond to the carrier’s actions. maintain up-to-date information on the claims adjudication and appeal processes for each insurer you work with. Carriers typically include this information on their websites and, if applicable, provide hard copies of the information each time you sign a new contract with them.

  5. Keep records on disputed claims When you call an insurance company for more information about a claim, keep a record of the information given to you, along with the full name of the representative with whom you spoke. store this information with other key information about the claim, including: why the claim was partially paid, delayed or denied; the actions your office took to follow up on the claim; and the result these records can play an important role in future actions, such as taking your appeal to higher levels, filing complaints with the state insurance commissioner, and/or initiating further litigation. The records can also serve as a useful archive of sample appeal letters and documentation that can help your office avoid or resolve future claim denials.

  6. remember help is available while handling claim denials can be a frustrating process, it can save you time and money in the long run by alerting you to insurance expectations and requirements carriers you contract with. By ensuring that your billing procedures are consistent with company requirements, you may be able to reduce the occurrence of rejections and denials in the future. however, if you continue to have reimbursement problems with a particular insurance company, contact your state insurance commissioner’s office for assistance. For additional guidance related specifically to Medicare claims, see “Avoiding and Handling Medicare Claim Denials.”

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