Receiving reimbursements for the services rendered by the provider is an essential component in ensuring that the facility is up and running. A healthcare facility needs funds to pay staff, buy supplies, and treat patients.

That is why it can be frustrating if a claim is denied. There are so many reasons why an insurance provider may deny a claim. Some of these reasons are simpler, while others are complex. Understanding these reasons is key to preventing them.

Here are some of the reasons why claims may be denied.

Prior Authorization Required

There are times when a claim may be denied because earlier authorization from the insurer was required. In some cases, procedures such as CT scans or MRIs are included on the re-authorization list. If you want a specific procedure done but you are not sure if prior authorization is needed, it is best to give the insurance provider a call to confirm.

Missing or Incorrect Information

Humans are prone to making mistakes. Which is why it is crucial to double-check the information on the claims. A claim may be denied if there is information missing like a service code. In addition to that, a claim may also be denied because the information was not entered correctly. That’s why a healthcare facility should hire the services of risk adjustment company to eliminate any errors.

The Claim was filed Past the Deadline

Different insurance companies impose different deadlines for claim submissions. Some of them also have policies about what you can do when you miss a deadline. In some cases, you can simply give the insurer a call to clear things up, but sometimes, you may have to fill out more paperwork. The best thing you should do is to submit claims as soon as possible after services have been rendered so that the revenue cycle does not slow down.

Inadequate Medical Necessity

There are instances where an insurance company may not pay for a procedure, they think is not medically necessary. This can be difficult for both parties involved but can be easily avoided. Whenever a procedure is not clearly defined, good communications among patients, insurance companies, clinicians, and medical billing staff is crucial to make informed decisions.

When a medical claim has been denied because of medical necessity, the healthcare facility could be forced to either collect the entire amount from the patient or just forget about it.

The Service Rendered is not Covered by a Patient’s Plan

When it comes to health insurance, there can be exclusions. These could be cosmetic surgeries or treatments not approved by the FDA. To avoid this, it is best to contact the patient’s insurance provider before you begin the service. Most patients are not aware of what their plan covers and will inquire from your office. Speaking to the patient’s insurer will make it possible to get all the patient’s questions answered.

Out-of-date Insurance Information

It is crucial to update patient records. Claims can be denied because of outdated insurance information, such as sending the claim to the wrong insurer. As a healthcare provider, it is your duty to ask the patients if they recently switched jobs. This will help you to send the claim to the correct insurance company.