The Intake

Insights for those starting, managing, and growing independent healthcare practices

Clean medical claims: What you need to know for increased revenue

It’s not enough to just be proficient at submitting clean claims. Get the latest trends in medical claims submission from a medical industry expert

doctor analyzing clean claims in medical billing

It’s no secret that medical insurers are rejecting many more claims than they did just a year or two ago. That means that practices must put more time and energy into accurate submissions to avoid lengthy delays or nonpayment. An industry expert explains what has changed and why — and gives practical suggestions you can use today to reduce or even eliminate denials.

Elizabeth Woodcock, DrPH, MBA, FACMPE, CPC is a speaker, author and trainer who specializes in improving medical practice operations and revenue cycle management. We spoke to her about how practices can reduce payer denials.

Here’s her take on the latest trends.

Q: Have you observed that claims are rejected more now than in the past, before the pandemic?

A: It’s a proven fact. What happened during the first year of the pandemic was that people put off doctor’s visits and elective surgeries because they were afraid of getting Covid. But they kept paying their insurance premiums, of course. Insurer profits soared to never-before-seen levels. Insurers (and their stockholders) got accustomed to these huge profits, which are unsustainable in more normal times. Their only recourse was to make it harder for providers to get paid, which helped limit payer cash outlays.

Q: How big is the problem of claims denials?

A. It’s huge. Each denial costs about $15. But add to that the fact that every time a claim is denied, your chances of receiving full payment are cut. Second and third resubmissions are much more difficult to collect on than original ones. To make matters worse, often a patient cannot be invoiced for their cost-share until insurance has kicked in. The greater the interval between service and invoicing, the less likely the patient is to pay.

Q: What can medical practices and billing companies do to prevent delays or denials?

A: The whole game has changed. Before, speedy submissions were the ticket to prompt and complete payments. Now the emphasis is on accuracy. Submitters have a huge mountain to climb, because claims have to be perfect. The bar is set really high. 

“Garbage in, garbage out.” The old adage really applies to claims processing. Because automation is replacing humans throughout the insurance industry, any little error on the submitter’s end is likely to be caught by super-efficient computer auditing functions.

A biller’s job is to eliminate any and all “garbage” — meaning mistakes. Automation at the provider’s end really increases accuracy too. Having a powerful billing system with integrated reporting makes business intelligence much easier. Then pay attention to all of the alerts that the system sends. I’ve seen too many users override alerts, not realizing that that “pesky” flashing light could prevent them from submitting errors.

Q: What’s happening with patient deductibles and copays?

A: This is another area of rapid change in 2022. Most insurers no longer cover the entire cost of many services, including COVID-19 treatment. Patients are ending up with much higher bills than before. And that’s bad news for providers, because patients tend to be the most difficult payers. 

The landscaping is shifting so quickly, in fact, that we billers often do not know how much a deductible or copay will be at the outset of patient engagement. We have to wait until the insurer gets back to us. This puts us at a disadvantage. It makes it difficult to estimate or collect the patient’s portion early in the process — which is the best time to do so. 

Q: How can practices make sure that patients pay their share?

A: They can keep patients happy. One study shows that satisfied patients pay their bills 74% of the time, and 95% would return for future service. On the other hand, dissatisfied patients only pay of 33% of the time, and 58% say they would come back again. A whopping 45% of patients surveyed said that post-visit services (billing, insurance, follow-up, etc.) were the worst part of their entire patient journey.

Q: What can providers do to keep patients happy — and keep them paying?

A: Practices must increase patient engagement, ensuring a superior-quality encounter at every level of interaction, including billing and collections. If patients receive excellent clinical care but have a negative billing experience, they will spread the word like wildfire on social media or review sites. Or worse, they might dispute the bill using the No Surprises Act. 

Q: What are some suggestions for improving patient engagement?

A: First, practices must embrace their billing team, whether it is internal or outsourced. Too many in-house back-office teams are relegated to a basement or windowless corner of the building. And too many outsourced billing companies are considered to be outsiders — even though the revenue they bring in feeds the entire enterprise. If everyone in the practice feels like a united team, they can work together to improve the patient experience. For example, when front-office administrators understand billing issues, they are less likely to make errors when collecting registration and eligibility information. Fewer billing mistakes make for happier patients – who are then more likely to pay their share.

Secondly, practices can hire or assign an employee to be in charge of the Patient Financial Experience. (As an aside, I recommend giving office staff respectful titles like Director, Manager, and Specialist to boost morale and self-esteem in the workplace.) As appropriate, this person can meet with patients before intake to assess their financial concerns and set realistic expectations about costs. The employee is also connected to the billing and collections process, establishing a clear workflow for claims routing.

The employee should have some accountability for patient satisfaction, and even better if it can be part of their annual review. While it’s true that most billing departments are chronically understaffed, I believe that practice owners will see a positive correlation between creating a Patient Financial Experience role and revenue cycle improvements, which will more than justify the staff allocation.

Q: Can you clarify why a team approach to patient engagement is so important for cleaner claims?

A. Well, most practices contain silos. The receptionist thinks that rejected claims are the responsibility of the billers. The billers blame the receptionists for mistakes during the registration process. And so on. But everything is changing with telemedicine and remote services. In behavioral health practices, for instance, a patient may never come into the office. It’s possible, therefore, that a biller could help with eligibility — and learn a lot about the myriad potentials for slip-ups during data input. Or the receptionist might assist with collection calls. When responsibility silos are removed, staff can see the big picture, which is all about creating and maintaining a better patient experience.

Q: What else can practices do to ensure cleaner claims?

A: First, practices must strive for 100% accuracy while the claim is still in their hands. This is where you have the most control. They can maximize all of the tools built into their systems, such as a claims scrubber. They can have patients input insurance and demographic information themselves through the patient portal available in many EHRs today. Also, they can keep their ear to the ground and analyze trends. Each and every rejection or denial should be studied and reported to the practice’s assigned Director of Denial Prevention. A weekly denial report should detail as much business intelligence as possible, including the volume, dollar value and message associated with each rejection or denial.

Detailed reports let you detect patterns with particular insurers, alerting you to potential quirks built into their software. About half of denials are due to correctable errors at the practice end, and the other half come from insurer policies. If you suspect a denial pattern from an insurer that seems unjust, contact the payer and/or report it to your state’s insurance commissioner.

Q: Any parting words of advice?

A: Billers must be hyper vigilant. They must do constant research to stay on top of industry developments. They must be proactive, challenging insurers when practices seem unfair. And it bears repeating the ‘garbage in, garbage out saying. The goal in billing is always 100% accuracy.

More FAQs about clean claims

Q: What is a clean claim?

A: A clean medical claim contains all of the information required by the payer and is filed in a timely manner. Many states have created specific language in prompt payment laws, so check yours. See Virginia’s as an example.

Q: Are rejections different from denials?

A: Yes. A rejection is a claim that is returned to you for correction before it gains entry into the payer’s system. This is typically a function of your billing system and/or your clearinghouse. Once you are alerted to the problem, you can correct and push it back out. Rejections are typically noted in real-time, avoiding delays. A denial, on the other hand, is a claim that has been accepted by the payer, reviewed, and returned to the provider with either no payment or only a partial payment. You can then correct and resubmit it, but the combined process often takes months, putting a drain on cash flow.

Q: What stages do rejections go through?

A: Rejections are first reviewed in your billing system, checked for correct setup of providers, payers and patient demographics. The next stage happens at the clearinghouse, looking for errors like subscriber ID prefix omissions. The final stage occurs at the payer’s end, where patient demographics and eligibility, coverage and coding issues are typically found.

Q: What are the most common medical claim rejections?

A: The most common medical claim rejections are due to typos in codes or missing codes. Next come mistakes in patient information (name, date of birth, missing group number, etc.). These are also the most preventable mistakes, and are easily caught with a good claims scrubber in your EHR, such as what we offer in the Tebra EHR. Q: What is a “good” clean claims rate? A: Kareo believes that a 99% First Pass Acceptance Rate is possible for all practices if the steps are taken to submit the cleanest claims possible to prevent claim denials.

Q: Is writing off denied claims a good practice?

A: No. Writing off just one denied claim a week can result in thousands of dollars lost to net revenue. Half of all rejected or denied claims do not get reworked – leaving hard-earned money on the table. Each and every denied claim should be reviewed and reworked.

Q: What is the No Surprises Act?

A: The No Surprises Act,  went into effect January 1, 2022, protects patients from unexpected medical charges. It increases transparency about charges and limits patient responsibility for unforeseen bills. It also lets medical providers and insurers negotiate bills without involving the patient.

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Written by

Alesa Lightbourne, healthcare writer

Alesa Lightbourne is an award-winning author, professor, and former dean of an international business school. As a healthcare writer, her clients have included Fortune 50 companies, and her works have appeared in mainstream business, scientific, and medical publications.

Reviewed by

Elizabeth Woodcock

Dr. Elizabeth Woodcock is the founder and principal of Atlanta-based Woodcock & Associates. She has focused on medical practice operations and revenue cycle management for more than 25 years. She has led educational sessions for a multitude of national professional associations and specialty societies, and consulted for a diverse range of clients.

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