It’s always much easier to complete a task correctly the first time than to go back and make corrections later. With time being our most valuable and limited resource in the workplace, finding enough of it to get through our current list of daily tasks is challenging. In terms of the revenue cycle, when claims are denied, it takes time to process them.

Denials not only slow down payer reimbursements, they can also be frustrating for your staff. Think about your busy coders, who put their emphasis on quality so each claim is accurate – your coders just want to code and keep up with the demand of the new claims. Piling on a list of coding-related denials to the workflow complicates things.

There’s no question that working through new encounters to code and coding-related edits is important, but so is working coding-related denials. It can come down to a matter of priority and first in line will always be the new charges.

Denials slink to their place at back of the line, with the mindset that they can be worked “whenever.” That’s not really true, because zero percent of denied claims are reimbursed. As an example, one healthcare organization could have lost out on a $50,000 payment for a denied spinal surgery if a simple modifier hadn’t been corrected.

1) Education and Training

Perhaps your medical coders just don’t know how to resolve a particular denial so it gets skipped or overlooked. Sometimes the reason for a denied claim is not immediately apparent. It could be a mistake from the payer, or the claim incorrectly landed in the coding denial bucket. There are many potential reasons for a coding-related denial including modifiers, diagnosis, and CPT codes.

Keeping thorough and relevant documentation on how to work denials allows your coders to resolve them faster and with ease. Providing training on different scenarios builds confidence in quickly identifying the denial reason and performing the necessary action(s).   

When coders begin working coding-related denials for a specialty they are not all that familiar with, it will take some time to build the confidence and knowledge on how to handle those particular denials. Be sure to account for this ramp up time.

Working denials can be complicated mostly due to payer rules.  For example, certain states’ Medicaid plans require unconventional modifier application to certain CPT codes in order to reimburse appropriately.

Just for review, there are three main ways to handle a coding denial:

Send an appeal - Typically, the coding staff won’t handle the appeal directly, but they must verify that the original coding was correct by reviewing that the medical documentation supports the code selection.

Correct and resubmit the claim - The coder will amend the claim with the correction once he or she has identified what action needs to be taken. Best practice is to work through the steps by taking it one step at a time. Check what is referenced in the billing notes and the EOB. Review the chart, the charges, and the payer’s policy to understand the whole story.

Adjustment review - If the denial is valid and there is no means of appeal or correction, the coder recognizes that the denied service(s) will not be reimbursed, and will recommend adjusting off the denied charges.

2) Communication is Key

In addition to documenting denial workflow so all of your medical coders have the correct knowledge to work them, it’s important to analyze the data and act on trends to resolve the root cause. This will help prevent future denials.  

As issues and trends are identified, this information must be communicated with providers, practice staff, billing office staff and IT staff.  Are we seeing an increase in denials with a particular payer?  Is an individual provider struggling with code assignment? Are there new codes we are not using? Are we selecting expired codes? You need to think critically about how to prevent denials from occurring. System edits and education opportunities are the two most common solutions.   

3) Who will work the Denials?

Some of your coders may enjoy working denials because they get to investigate and problem solve, while others may prefer front-end coding. Either way, you have to dedicate coders to work coding-related denials before they pile up. If you have a backlog of denials, outsourcing this work can be an efficient and no hassle solution. Maintaining dedicated staff to work coding-related denials will prevent future backlogs

The Bottom Line

Coding-related denials are a serious issue because not working them costs healthcare organizations money. They are a challenging aspect of the coders’ responsibilities and often at the bottom of the list of priorities. Help your coders to process denials quickly and easily to make the job simpler and less time consuming with the appropriate knowledge, training and tools.