Top 11 ways physicians can fight back against denials

Seventy-five percent of physicians say frequent payer denials are an ongoing problem at their practices, according to the Medical Economics Payer Scorecard. Rejected claims are clearly a source of frustration, but is there anything physicians can do about them?

Yes, experts say. Consider these strategies to better handle denials.

 Don’t “deny” the denials 

Many physicians incorrectly assume that they’re not experiencing denials simply because cash is flowing into the practice, says consultant Elizabeth W. Woodcock, MBA, CPC. 

This is rarely the case, Woodcock says, adding that a 5% denial rate is average, and anything above that should be cause for concern. 

Dig into the data 

Identify the root causes of the denials, and take steps to address those causes, says Maureen Clancy, MBA, FACHE, CPC, senior vice president of revenue cycle management and credentialing at Privia Health, a physician practice management and population health technology company. 

This is especially important in the case of denials stemming from incorrect patient information. “Otherwise, what happens is that the billers keep fixing the [registration-related] errors, the front-end keeps making the errors and the loop continues,” Clancy says.

Pre-registration is one solution. Another is to make time for validating patient information, she says.

Pay attention to the patient’s specific health plan, says Raemarie Jimenez, CPC, vice president of membership and certification at the AAPC, an organization representing medical coders. A physician might have a contract with a particular insurer, for example, but it might not be the specific plan covering the patient. 

“Verification of insurance is so important-not just the first time the patient comes in, but each and every time,” she says.

Consider using the patient portal for part of the registration process, Clancy says. For example, Privia Health directs patients to the portal prior to their appointments so they can fill out most of their own demographic information. 

That gives front-office staff members more time to focus on entering patient insurance information correctly and confirming it when the patient arrives for his or her appointment, she explains. 

Have someone monitor denials as they occur

If the practice receives paper payments, this may require asking the coder or biller to manually post denials in the practice management system using the claim adjustment explanation code associated with the denial, says Jimenez. 

If the practice uses electronic payment posting, ensure that the practice management system posts denials and their associated reason codes automatically, she says. Once denials are entered into the system, it’s much easier identify trends, such as denials from expired contracts. These are easy to spot and fix when running reports based on the denial code.

Invest in administrative staff

This includes hiring a certified medical coder and a skilled registration clerk. Many practices also outsource their billing, but should be sure the coder at the outside firm is certified.

Also invest in updated coding manuals annually, and ensure that EHR vendors update any problem lists annually by October 1 (for ICD-10 diagnosis codes) and January 1 for CPT codes, says Jimenez. Don’t rely on outdated manuals.

Work the scrubber edits

These are the billing system warnings that occur before claims are sent to the payer, says Clancy. 

For example, a scrubber edit may indicate that a certain coding modifier is necessary prior to submitting the claim. Ideally, a practice should have twice as many scrubber edits as back-end denials. This ratio means the practice is addressing coding or billing errors immediately without having to wait 20 to 30 days for the payer to adjudicate and deny the claim, she adds. 

Use denials as teaching tools for physicians

Ask coders, billers or other members of the administrative staff to identify and present the top five to 10 denials for the practice on a weekly basis, says Woodcock.

Treat these sessions as a benefit for physicians, Clancy says. “If it’s done in the spirit of training and improvement-and not seen as punitive-it’s usually very well-received,” she says.

Know each payer

When practices receive a denial, they should contact the insurer to determine exactly what information it needs to process the claim-and provide this information consistently in the future, says Patricia Cortez, practice administrator at Plano Internal Medicine Associates, PA in Plano, Texas. 

Pay attention to contracts, says Clancy. For example, does a payer reimburse for labs done in-house, or does it require the practice to send labs out?

In addition, payers may have unique requirements related to reporting routine blood capture, says Jimenez. Most payers bundle this into an E/M service performed on the same day; however, if the blood draw occurs on a different day than the E/M service, physicians may be able to unbundle the draw and receive separate payment, she adds. 

Focus on payer documentation requirements, especially when billing a sick visit on the same day as a preventive visit. This happens often as patients with high-deductible health plans try to maximize their annual wellness visit by asking the physician to address their acute problems as well, Jimenez says. 

Payers want to see that physicians spent a significant amount of time separately addressing a patient’s acute medical issues beyond what would normally be required for the preventive exam. The sick visit usually requires an extended history and more complex medical decision-making. Only then may they report a separate E/M code with a modifier -25 in addition to the preventive service. 

Review medication formularies before prescribing

Prescribe generic medications whenever possible, and check the formulary before prescribing, says Yul Ejnes, MD, MACP, an internist with Coastal Medical in Cranston, Rhode Island. 

Physicians may be able to convince a payer to cover a drug that isn’t included on the formulary, but only if they can provide detailed documentation regarding why the patient needs that specific drug, Ejnes says. 

J. Fred Ralston, Jr., MD, MACP, an internist in Fayetteville, Tennessee, says he frequently sees denials for albuterol inhalers. 

“My [EHR] won’t let me write this as a generic, so I add a note in the comment section of each standard script stating, ‘May change to different branded HFA albuterol if preferred on insurance, but please let us know so we can adjust the records.’”

Joseph W. Stubbs, MD, MACP, an internist at Albany Internal Medicine in Albany, Georgia, and a physician leader in Privia Medical Group, uses the web-based service Covermymeds.com, which electronically automates prior authorizations, thereby reducing medication-related denials.

Stubbs also works to develop relationships with local pharmacists who help him identify which drugs are and aren’t covered under certain plans, including Medicare Part D. 

Understand medical necessity requirements

Order only clinically appropriate tests, and be familiar with local coverage determinations as well as prior authorization criteria, says Ejnes. 

For example, if a patient presents with lower back pain and an exam reveals only a slight tenderness in the patient’s back, an MRI is likely not warranted, he says. 

Appoint someone in the practice to monitor payer policies

Woodcock recommends having a biller spend one hour per month visiting the websites of the practice’s major payers to identify any policy changes. 

 Report specific diagnosis codes, when possible

Identify all comorbid conditions that are treated or managed during the encounter-and be as specific as possible with the diagnosis, says Jimenez. Doing so helps support the E/M levels assigned, and prevents denials due to a mismatch between the diagnostic severity and E/M level.

The ICD-10 grace period for physicians ended last October, and Stubbs says he has already seen denials due to a lack of specificity-even when that specificity is lacking on the secondary (not primary) code for the encounter. 

Physicians should make a list of the most common chronic diagnoses they treat, and identify what specificity is required for each code, says Stubbs. “People need to go ahead and get used to this and change their problem lists to reflect ICD-10 codes that are more specified,” he says.