The Problem of Medicare Claim Denials

Many hospitals and clinics are struggling with losses due to piling Medicare claim denials. The increasing number of cases was linked to several factors including medical necessity and the failure of healthcare facilities to follow updated guidelines for submitting claims.

In 2011, the American Hospital Association reported that medical necessity was the top reason for thousands of Medicare claim denials. Since then, this has been a prevailing issue in the medical industry in the U.S. The medical necessity for renal and urinary tract disorders was cited as the top issue. Irene Barron, Chief Operating Officer at nTelagent, Inc., said that hospitals must resolve medical necessity issues prior the point of service to identify potential problems before submitting claims. “A lot of [hospitals]are doing it after the fact or not at all.”

Ms. Barron advised medical facilities to raise awareness on the part of doctors and hospital staff. It is important for attending physicians to provide adequate documentation of medical necessity. The hospital staff must quickly and accurately confirm patients’ information based on the documentation from doctors. This requires hospitals to have tools that provide individual physician statistics that can be shared, according to Mr. Barron. She added that hospitals and clinics must consider real-time scripted computer programs that guide staff in confirming medical necessity.

Hospitals are plagued by claim denials due to claims that follow outdated guidelines. There are several ways to avoid this costly mistake.

1. Be Aware of Changes in Guidelines

Track changes in Medicare claim guidelines and rules. A staff must be assigned to monitor the latest procedural changes. Medicare rules are very strict when it comes to process and the information filed for claims. Don’t miss any steps, updates or any recent changes in their guidelines.

2. Keep Information As Recent as Possible

Hospitals must take a proactive measure in keeping the patient information up-to-date. Knowing about current Medicare information will help verify the records and prove that you have the latest information to make your Medicare claim valid.

3. Identify Your Doctors

Based on new rules, Medicare can deny certain claims if the ordering or referring doctor is not properly identified or enrolled in the Medicare system. Thus, hospitals must understand provider issues and know whether they are eligible to order or refer.

4. Create a Proper Claim Denials Process

Hospitals have to be more pro-active when it comes to dealing with piling denials. Most hospitals in the country already have a backlog of claim denials in their system. There has to be a dedicated team with an integrated process that deals with this type of administrative problem. A new standard for processing Medicare claims must be integrated.

5. Effective Communication

Finally, a key measure to reduce Medicare claim denials is to have effective communication channels among doctors and staff members. People must be well-informed about government guidelines, and these rules should be echoed to the rest of the team as soon as practicable.

Photo by: The National Guard