Dealing with denials and underpayments
By Marc H. Sencer, MD

Anyone who has ever submitted claims for payment will tell you: It’s a hostile reimbursement climate, with denials and underpayments a fact of life.

You may be able to “warm” the climate a bit, however, if you properly manage denials. Doing so can mean the difference between being in the black or in the red.

Test your knowledge of this important topic with today’s quiz.

Which statement(s) is true?
A. It is better for a claim to be put into review than to have it denied.
B. Speaking with a customer service representative of the insurance company is likely to resolve most denials and underpayments.
C. The first step in managing denials is to do an analysis of the EOB (explanation of benefits).
D. Having a payer reimbursement profile for the codes most commonly billed can help to “bulletproof” your practice against many denials and underpayments.

“A” is false. Having a claim put into review is the worst possible situation. When a claim is in review, the insurance company can take its time to resolve it. Sometimes the company holds up all claims, pending review of the previous claim.

In some cases, your only recourse to get paid may be to hire an attorney to get the review resolved.

Tip: You can avoid reviews by not billing excessive amounts relative to standard guidelines and making sure your diagnoses meet the payer’s standard for medical necessity.

“B” is also false. Customer service representatives (CSR) are typically the least knowledgeable people in the insurance company hierarchy. If a CSR cannot resolve your issue immediately, move directly to the regional representative or supervisory person above the CSR.

Remain calm, but firm, when dealing with each person. Always memorialize each telephone encounter with a certified mailing and a fax or e-mail to the appropriate person, and include copies in your insurance file.

“C” is true. To manage denials, it is helpful to categorize them into specific types after analyzing the EOB.

• Denials due to clerical errors, such as misspelling a provider’s name or your address, are easily caught and corrected.

• Denials due to incorrect coding, including incorrect use of modifiers, are also easy to correct and may be prevented by using a clearinghouse or claims scrubbing software.

• More difficult are denials for clinical reasons, such as lack of medical necessity or incorrect diagnosis. Sometimes you or your billing staff may need the provider to review the file and explain what they were doing in these cases.

“D” is true as well. You can avoid many denials, especially the clinical type, by knowing the payment and denial patterns for the different services you provide grouped by payer.

For example: Knowing Medicare will not pay for a bilateral procedure if diagnosis “x” is used, but will pay if diagnosis “y” is used will guide you into using the correct code in the future, provided you have clinical evidence for diagnosis “y.”

Often this is a trial-and-error process. As you collect reimbursements and get denials or payment cuts, record this information in a profile for each insurance company you deal with. Update the profiles as needed, and you will have an excellent system for avoiding many denials.

Marc H. Sencer, MD, is the president and founder of MDs for DCs, which provides intensive one-on-one training, medical staffing, and ongoing practice management support to chiropractic integrated practices. He can be reached by phone at 800-916-1462 or through the Web site, www.mdsfordcs.com.