When Will Claims Be Paid?
A question we are often asked is how long it takes to get a claim paid. It sounds like a simple question, but it isn’t. Certainly, every billing company and every biller wishes it were so simple. The reality is that it depends on many factors. Let’s break it down.
First Steps
It all starts with patient registration. The patient’s name must exactly match what the insurance carrier has on file. This includes the middle name or initials if the patient used that when signing up for their insurance. Next, benefits must be verified, and pre-authorizations obtained. The pre-authorization must match both the date of service and the service rendered. Next, is coding. The code must be valid and if a modifier is required then, one must be used. If you use a modifier and one isn’t required, this will result in a denial. Bundled services cannot be unbundled when coded. If any of these things are wrong or missed, then the claim will be denied. According to healthcare.gov statistics, 27% of denials are due to issues with patient registration and eligibility for the medical claim
Charge Entry Matters
The clock starts from the date of service. That is day 1. Now add the number of days it takes to enter the charge. The goal is to enter all charges on the day of service but according to MGMA, the average practice takes five days to enter charges. So, the day of service plus the number of days (assume MGMA average) it takes to enter the charge and the claim is already 6 days old before it even gets to the billing service.
Out the Door
The next step depends on your billing service, their internal procedures, and to some extent the software they use. Some billers process claims once a week on set days. At Onpoint claims are processed daily. Onpoint also creates edits that are scrubbed manually, our system also electronically scrubs the claims whereby the software scans over 10,000-line items looking for data entry errors that may have occurred during the patient registration process. Unfortunately, electronic scrubbing cannot catch spelling errors, missed initials, missing pre-authorizations, or benefit ineligibility.
How long does all this take? As mentioned before, it depends on when the biller works and processes your claims. Onpoint electronically and manually scrubs every claim and submits it to the carrier within 2 days of receipt. So, 6 days + 2 and it is now 8 days after the day of service.
Clean Claims
You may have heard the term ‘clean claim’. Quite simply it means that everything was done correctly and in accordance with your contract with the carrier and the carrier’s rules. If everything was done correctly up to this point, then you can expect reimbursement anywhere from 10-30 days depending on the carrier’s processing time.
Of course, a carrier’s processing time is impacted by staffing issues, vacations, and holidays. All the same kinds of issues that your practice must deal with. The difference is that when this happens carriers have no problem saying we are sorry, but we are behind 30, 60, or even 90 days. This means the biller must call every 15-30 days to obtain a status. All of this will delay reimbursement.
Denied – Now what?
What most people don’t think about is that the insurance company makes money by collecting premiums and reducing expenses. Every claim is an expense to them. Therefore, the reality is that their goal and the goal of your practice are at odds. 1 out of 7 claims is denied amounting to over 200 million rejections each day. In-house billers are stretched thin and working denials is both hard work and costly for a billing company. On average it costs $25 to rework a single claim so from a cost analysis standpoint it doesn’t make sense. According to the Healthcare Financial Management Association (HFMA), 65% of denials are never re-worked.
A billing service that works denials and files appeal letters is worth its weight in gold. It takes time and effort. You won’t get your money right away but if the denial is truly being re-worked then statistically around 40% of denials get over-turned. Remember the cost of re-working a claim is $25 every time it is touched therefore denials are typically not worked or at least not worked until completely resolved. In 2019, 119 major medical carriers denied over 40 million claims combined, and fewer than 64,000 were appealed. Appeals are a headache. They are the longest and most expensive route to collect amounts due.
Is there a Solution?
Unfortunately, there is no perfect solution but there are things that can be done to decrease denials and improve your cash flow. It takes teamwork. There can be no blame or finger-pointing because everyone must do their part and do it correctly the first time. The blame game doesn’t get the claim paid.
The good news is that 90 percent of all denials are preventable.
First and foremost, identify the reason for denials. Is patient registration entered accurately and with complete information? Were benefits verified? Do you have a referral and pre-authorization? Does the medical documentation support medical necessity? Is it coded correctly? Are modifiers being used correctly?
Once corrective action is in place and done consistently there will be an improvement in cash flow. The answer is never to just re-bill as initially submitted. Wrong is wrong and the carrier will not pay unless the claim is corrected. Most importantly, they are the final word regardless of what anyone thinks. They hold the purse strings so getting it right the first time is paramount.