Nobody wants to see a claim denied by an insurance company. A denied claim means lost or postponed revenue for your optometry practice. Trying to figure out why a claim was rejected in the first spot can result in longer, disappointing hours of research and re-submission. As a result, providers never rework nearly 65 per cent of denied claims.
You must not only follow strict state-specific coding and audit regulations, but you must also evaluate medical documents and physician notes to ensure that claims are not under or over-coded. The best return on that investment is to learn how to avoid rejections or denials in the first place (ROI).
The good news is that 63 percent of rejected claims can recover on average, and nearly 90 percent are avoidable. Let’s take a better look at the most common coding denials and their causes and how you can implement a proactive solution to enhance your business income.
What is a Coding Denial?
A denied claim has passed through the adjudicatory system—it has been collected and processed by the insurance company or third-party payer. However, the claim for services received from the health professional has been considered unaffordable.
Payers will submit you an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA) describing why your claim was rejected. Even if a payer denies a claim, that doesn’t mean it’s not payable or you can’t respond. Before resubmitting the claim, you must evaluate why it was rejected and correct any errors.
What Is the Distinction Between a Diagnosis Code and a Procedure Code?
Diagnosis code: The ICD-10-CM diagnosis code describes the patient’s condition and diagnosis and treatment, whereas the ICD-10-PCS code describes inpatient processes. A diagnosis code informs the insurance company why you provided the service.
Procedure Code: A healthcare, surgical, or lab tests procedure is described by the American Medical Association® Current Procedural Terminology (CPT®) code. The 2019 CPT® code changes went into effect on January 1, 2019.
The American Medical Association (AMA) publishes CPT® codes composed of 3 classifications of five-character codes and two-character modifiers to explain any adjustments to the procedure.
Category 1: Describes the services and procedures provided by providers.
Category 2: Maintains a record of follow-up and results.
Category 3: Denotes the application of emerging technologies.
Common Coding Denials and Adjustment Explanations
Claim denials are classified into administrative, clinical, and policy. Administrative errors make up the vast majority of claim denials. You can resubmit the claim to the insurance payer after you have corrected the errors.
For example, the diagnosis and procedure codes may be inaccurate, or the patient identification and provider identifier (NPI) may be lacking or incorrect. Let’s look at some standard claim denial codes, reasons, and actions.
CO-4: The procedure code is incompatible with the modifier utilized, or the needed modifier for adjudication is lost. For that process, use a suitable modifier. Some lab codes, for example, involve the QW modifier.
CO-15: Payment was adjusted because the authorization number forwarded was missing, incorrect, or did not apply to the billed offerings or provider. Submit the claim again with the authorization number or valid authorization.
CO-50: Non-covered services that the payer does not consider a “medical necessity.” When using a CPT® code, you must also prove that it is “reasonable and necessary” to treat and cure the patient’s health condition to prevent coding refusals. “Evidence-based clinical quality of practice” is used to determine medical necessity. Examine the diagnosis codes or the bill to the patient.
CO-97: The payment was modified because the value for this service is already included in compensation for another service/procedure that has been assessed. Approve the modification or resubmit the claim with the relevant modifier.
CO-167: The diagnostic (or diagnoses) is/are not recognized. Examine the diagnosis code(s) to see if a different code(s) was used instead. Fix the diagnostic code(s) or bill the client.
CO-222: Exceeds the provider’s stipulated maximum number of hours, days, and units for this time.
CO-236: According to the National Correct Coding Initiative (NCCI) or worker’s compensation state regulations/fee schedule requirements, this procedure or process combination is incompatible with another procedure or procedure/modifier combination performed on the same day. The service was paid for as part of another service you charged on the same day.
CO-B16: The payment was reduced because the “New Patient” requirements were not completed. Resubmit the claim(s) together with the confirmed patient visit.
OA-109: This payer/contractor does not cover this claim. You must submit the claim to the appropriate payer/contractor. Recheck coverage and resubmit the claim to the suitable carrier.
PI-204: The patient’s overall benefit plan does not cover this service/equipment/drug. Charge the patient.
PR-1: Amount deductible. Bill the second insurance company or the patient.
Adjustment of Claim Reason for Remittance and Remittance Advice Resources for Remark Code
CARCs (Claim Adjustment Reason Codes): Reason codes explain why a payment was changed and why a claim or specific service was paid differently than it was invoiced.
Remittance Advice Remark Codes (RARCs): Remark Codes are used to offer a different reason for adjustments that have previously been specified by a Claim Adjustment Reason Code or provide information about the remittance process.
Get Paid Faster with Fewer Coding Denials
We have considerable knowledge in medical billing and coding. Coders are well-versed in CPT® and ICD-10 coding, billing with code modifiers, electronic data exchange (EDI) protocols, industry standards, and ensuring 100 per cent HIPAA compliance. Our billers ensure that your claims are clean and error-free before submitting them, reducing claim denials and generating a constant and positive revenue flow for your business.
Request a free practice analysis now and start experiencing the advantages of fewer refused claims and faster reimbursements.
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Billing Executive – a Medical Billing and Coding Knowledge Base for Physicians, Office staff, Medical Billers and Coders, including resources pertaining to HCPCS Codes, CPT Codes, ICD-10 billing codes, Modifiers, POS Codes, Revenue Codes, Billing Errors, Denials and Rejections.
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