Medical Billing Errors

By Joni Lovvorn • September 3rd, 2010

More than ever it is critical that you have a staff or billing service who is competent, knowledgeable and has the means to stay on top of the medical billing industry each and every day.  With the Healthcare Reform sure to take shape in the next ten years you have to be able to adapt, implement quickly, efficiently and above all stay compliant. 

Take a step backwards in your own practice and evaluate what claims are not being processed and what payers are denying your claims the most.  Determine what are the most common mistakes and what can you do to improve your processes.  Here at Solutions For Medical Billing we evaluate our processes regularly and we can assess quickly where mistakes occur whether they are within our company or if there may be a problem on the front end.  Whatever the case is we identify the problems and we work to resolve them. 

It was interesting for us to see what the most common rejection errors were logged for our company.  What was interesting is that our top denial reasons were not the same as you would find on the national level.  I included a report from our clearing house to show you what our most common errors were vs what their entire data base errors were for August 2010.

Rejected Claim Report

The number one error for SMB is legacy ID for Medicaid, which I’ll explain a little later, however when evaluating all of the claims processed through the clearing house their overall number one reason is duplicate claims. 

The second most common error for the entire data base is patient eligibility.  I would bet if you researched these stats on the internet you will find that duplicate claims and patient eligibility are the two most common errors.

The third most common error is payer ID not valid.

I said I would explain the Legacy ID, well remember when we went through the big NPI mandate?  Medicaid will not accept the Legacy ID if you file electronically, but if you file via paper, such as in the case of secondary’s, they require the legacy ID.  A simple case of software update needed, but not a big enough problem to get it to the top of the wish list.  The comforting news is we fix all of our rejections immediately so worse case scenario is we lost a day.  Imagine if you will, a staff that doesn’t check the error reports.  You would experience an interruption of cash flow and in many cases a loss of significant revenue.  Again I can’t stress enough how important it is in having a specialized billing service or a competent and knowledgeable staff to handle your billing. 

The American Medical Billing Association provides physicians with a national Health Insurance Report Card.  I’ve attached the comparisons over the last three years plus the 2010 Report Card.  According to AMA they state that billions of dollars in administrative waste would be eliminated each year if third-party payers sent a timely, accurate and specific response to each physician claim. I can tell you that SMB spends a good deal of time calling insurance companies to find out why a claim has not been processed within a reasonable time, which is 30 days.  This function alone is the most time consuming task without a doubt.   

Payers participating in the 2010 NHIRC include Aetna, Anthem Blue Cross and Blue Shield (BCBS), CIGNA Corp., Coventry Health Care, Health Care Service Corporation (HCSC)(added in 2010), Humana, Inc. and UnitedHealth Group (UHG).

 2010 Health Report Card

2008-2010 Health Report Card Comparison

In my humble opinion as the medical industry changes so will our processes and it will become increasingly important to have specialists running your billing department. Already we are seeing changes such as Medicare mandating practices use Electronic File Transfers (EFT) and Electronic Remittance Advices (ERA), and it won’t be long before commercial payers are following suit.  Soon we will be using ICD 10 codes which could mean disaster for a lot of practices.  If you are using a software program that is  becoming obsolete then you could be facing a very large expense down the road. 

Medical billing errors is the biggest reason for loss of revenue, but there are solutions that you should really consider before it devastates your practice.

Joni Lovvorn
VP Operations
Solutions For Medical Billing, Inc.
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