by Government Relations Staff
March 10, 2004 — It costs time and money to deal with health insurance claims denials. But a combination of preventive actions related to claims filing and standard procedures for handling denials can help minimize the difficulty.
Be sure claims include all information requested on the CMS-1500 form, such as your Medicare provider number, CPT code, ICD diagnosis code, place of service code and date of service. Any claims lacking these details are likely to be automatically denied.
Check the carrier's Local Medical Review Policy (LMRP) for any restrictions or limitations on providing a service for which you are seeking reimbursement. Carriers must post their LMRPs online. To find a carrier's website address, visit the Centers for Medicare & Medicaid Services and click the "Contacts" link in the "Resources" section.
Familiarize yourself fully with the information about a service that you provide to Medicare beneficiaries as contained in the carrier's LMRP. For example, the LMRP lists diagnosis codes that support "medical necessity," which is a requirement for Medicare payment.
Know whether you have met the carrier's coding guidelines by reviewing the LMRP. Examples of issues addressed in coding guidelines include how to record the date of service when an assessment is not completed in a single encounter, whether the use of a particular code is limited to specific health care professions, and any restrictions on providing more than one service to a patient on the same day.
Review the LMRP for any documentation requirements. Although medical records may not need to be submitted with the claim, they often must be made available to the carrier upon request. Documentation requirements will indicate what must be included in the medical record. Inadequate documentation may trigger a claims denial or a delay in payment if the carrier requests additional information.
Examine the Explanation of Benefits (EOB) from the carrier, which should include the reason for a claims denial. If the denial involves information that's missing from the claim, you may simply need to supplement or refile the claim. If the reason for denial is not apparent when you review the EOB, contact the carrier for clarification.
Have a standardized letter handy asking the insurance carrier to reconsider your claim. It can be tailored to provide any necessary written clarification related to a particular claim.
Consider invoking your right to an appeal an adverse claims decision. If you want to file an appeal, be sure to make a written request to the carrier within 120 days of the initial claim denial.
Although the pointers above are geared toward Medicare claims, much of the guidance also is useful in dealing with private health insurance claims filing.