If you own an oncology practice, you can probably attest to how challenging it can be to work with a patient’s health insurance provider when it comes to billing. While insurance denials and the associated financial loss have always been part of running a medical office, the number of denials has been trending upward over the last few years, according to several studies.
One study comes from the American Journal of Managed Care (AJMC). According to researchers, between 2016 and 2020, medical claim denials increased by 23%, marking about an 11% increase in the number of claims denied upon initial submission across the U.S.
Today, across the entire healthcare sector, denial rates are averaging between 6 and 13%. Claim denials can cost medical practices thousands of dollars annually in lost revenue. While it’s impossible to avoid all denials, grouping claim denial codes can help keep them to a minimum.
A Leading Oncology Practice Management Company Explains How Denials Negatively Impact Oncology Practices
Denials and the resulting financial loss can take a tremendous toll on any medical practice. For context, a study published by the Healthcare Financial Management Association (HFMA) revealed that $262 billion of the roughly $3 trillion in total claims submitted by healthcare organizations get denied by health insurance providers. While denials and financial loss affect all medical practices from time to time, oncology offices seem to get hit the hardest. Most of these denials are attributed to one or more of the following:
- Failing to prove medical necessity
- Incomplete clinical documentation
- Not receiving prior authorization
- Patient eligibility issues
- Procedure coding errors
- Submitting claims with missing or incorrect data
- Submitting duplicate or late submissions
- Submitting invalid or outdated CPT or ICD-10 codes
Medical Practice Efficiency and Understanding Denial Codes in Medical Billing
When a health insurance provider denies a medical claim, they don’t simply say we’re not paying. They use denial codes to explain to physicians and medical practices why. Some of the many denial codes, also known as claim adjustment reason codes (CARCs), health insurance providers use today include:
CO 11 – This denial code denotes a diagnosis inconsistent with a performed procedure.
CO 27 – This code references a denial of medical expenses incurred after a patient’s health insurance coverage has expired or terminated.
CO 22 – This denial code comes into play when a patient has more than one insurance. When patients have multiple insurances on file, coordination of benefits decides who’s the primary, secondary, and tertiary payer. If oncology offices or general practices don’t follow coordination of benefits when billing, the patient’s health insurance provider reserves the right to deny a submitted medical claim.
CO 29 – This denial code indicates that the window for submitting a claim to a patient’s health insurance provider has expired.
CO 167 – This denial code is one that a health insurance provider uses when a patient is diagnosed with a condition not covered by their health insurance policy.
Grouping Claim Denial Codes: How Forward-Thinking Oncology Practices Avoid Losing Money
When a claim gets denied, oncology offices do have some recourse. They can resubmit a claim or file an appeal to help them receive payment for services rendered, and this applies to the common claim denial decodes referenced in this article and others that aren’t so common. However, the goal should be to avoid getting to this point. This is where grouping past denial claim codes come into play.
Oncology and general medical practices that understand and adopt a prevention-focused claim denial management process see fewer denials than those that don’t. Getting to this point requires familiarizing yourself with claim adjustment reason codes, and this is because they can provide valuable insights concerning why an insurance provider opted to deny rather than approve a particular claim.
Additionally, consider using claim adjustment reason codes to identify and change ineffective processing protocols to lower the chances of the same denials happening in the future. For example, asking a patient to verify their name, address, and DOB can minimize the likelihood of receiving a claim denial code C0 31, which is the code for “patient cannot be identified as our insured.” Grouping previous denials can go a long way toward lowering repeat CARCs from insurance providers, such as C0 11, C0 22, C 27, C0 167, and the like. Here’s one way to group them:
Practice setup
This group should consist of taxonomy code errors. They should also comprise provider and procedure code mismatches, facility and procedure code mismatches, and other mismatches that trigger denials.
Department
This group of codes should tie back to specific departments. For example, denials should be classified as accounts receivable or billing denials if an insurance provider denies a medical claim because a patient didn’t have active coverage when they received medical services.
Focus area
Like group denials based on department, doing so based on a particular focus area can be beneficial. Generally, this means grouping denial according to policies and procedures and making changes to those policies and procedures as necessary.
The Takeaway
Grouping and analyzing denials from health insurance providers can lower the number of future denials and may even help improve overall practice efficiency. However, for some medical practices, especially those specializing in oncology, this is a tremendous undertaking. Getting it done right often means enlisting the help of a trusted medical practice management company.
Verdi Oncology understands the challenges facing modern oncology practices, and we have the tools and expertise to improve patient outcomes and expand access to more affordable cancer care. Contact us to learn more about becoming a Verdi partner.