Published by Lookforzebras
Handling medical billing can be overwhelming, particularly in dermatology, where complex treatment codes, insurance regulations, and patient details often lead to claim issues. Moreover, One of the biggest hurdles is dealing with denials in medical billing, which not only delay payments but also demand extra time and effort to resolve.
In this blog, we’ll break down the top 10 denials in medical billing for dermatology, explore their root causes, and provide actionable strategies to minimize rejections and improve reimbursement efficiency
1. Incorrect Patient Information
One of the primary causes of denials in medical billing is incorrect patient information. Even worse, a minor typo in the patient’s name, date of birth, or insurance ID can result in a rejected claim. Furthermore, dermatology practices handle a high volume of patients, which means the likelihood of data entry errors increases significantly.
Denial Code: CO-16 (Claim/service lacks information or has submission/billing error(s)
How to Avoid: To ensure accuracy, implement a double-check system where patient information is verified at multiple points during the appointment. Additionally, using electronic health records (EHR) that integrate with billing systems can significantly reduce errors.
2. Invalid or Missing Authorization
In many cases, certain dermatology procedures require prior authorization from the patient’s insurance provider. Unfortunately, failing to secure or submit this authorization often results in claim denials.
Denial Code: CO-197 (Precertification/authorization/notification absent)
How to Avoid: To ensure a smooth billing process, establish and maintain a strong system for obtaining and tracking authorizations. Additionally, set reminders for required approvals and submit the correct documentation with each claim to prevent unnecessary denials..
3. Non-Covered Services
Dermatologists often perform treatments and procedures considered cosmetic, such as laser treatments for wrinkles or mole removal. Since insurance plans may not cover these services, patients often face claim denials.
Denial Code: CO-96 (Non-covered charge(s)
How to Avoid: Check the patient’s insurance coverage before administering treatment. If the procedure isn’t covered, notify the patient upfront about their financial responsibility.
4. Incorrect Coding
Dermatology involves a wide range of procedures, each with its specific codes. Using an incorrect code, whether it’s due to a typographical error or misunderstanding of coding guidelines, can lead to a denial.
Denial Code: CO-11 (The diagnosis is inconsistent with the procedure)
How to Avoid: Regularly train your billing staff on the latest denial codes in medical billing and ensure they have access to the most recent denial code list. Consider using coding software that can help identify potential errors before claims are submitted.
5. Duplicate Claims
Submitting the same claim more than once, whether by mistake or in an attempt to expedite payment, will often result in a denial.
Denial Code: CO-18 (Duplicate claim/service)
How to Avoid: Use billing software that flags duplicate claims before submission. If a claim must be resubmitted, ensure it’s marked appropriately to indicate that it’s a corrected claim rather than a duplicate.
6. Lack of Medical Necessity
Insurance companies often deny claims for services they deem not medically necessary, especially in dermatology where the line between cosmetic and medically necessary procedures can be blurry.
Denial Code: CO-50 (These services are non-covered services because this is not deemed a medical necessity by the payer)
How to Avoid: When submitting claims for procedures that could be perceived as cosmetic, provide thorough documentation that supports the medical necessity of the service.
7. Out-of-Network Provider
Patients may unknowingly seek treatment from an out-of-network provider, leading to denied claims or reduced payments from their insurance company.
Denial Code: CO-31 (Patient cannot be identified as our insured)
How to Avoid: Before the patient’s appointment, verify their insurance details and inform them if your practice is out of network. Offer to help them find an in-network provider if necessary, or discuss the out-of-pocket costs they may incur.
8. Coordination of Benefits (COB) Issues
When a patient has multiple insurance policies, confusion can arise about which policy should be billed first. If the wrong insurer is billed, the claim may be denied.
Denial Code: CO-22 (This care may be covered by another payer per coordination of benefits)
How to Avoid: Collect complete insurance information from the patient and verify the correct primary and secondary payers. Submit the claim to the appropriate insurer first, following COB rules.
9. Timely Filing
Insurance companies enforce strict deadlines for claim submissions. If you submit a claim after the deadline, they will deny it, regardless of its accuracy or completeness.
Denial Code: CO-29 (The time limit for filing has expired)
How to Avoid: Establish a process to ensure claims are submitted promptly. Use billing software that tracks filing deadlines and alerts your team when a deadline is approaching.
10. Incomplete Documentation
Incomplete or missing documentation, such as lab reports or referral letters, often causes claim denials. In dermatology, where treatment plans involve multiple steps, providers must maintain comprehensive documentation to ensure claim approval.
Denial Code: CO-16 (Claim/service lacks information or has submission/billing error(s)
How to Avoid: Train your team to prioritize thorough documentation. Create a checklist for required documents and confirm all necessary information is included before submitting a claim.
Handling Denials in Medical Billing Management
Handling denials in Medical Billing efficiently is crucial for maintaining the financial health of your dermatology practice. Here are some tips for effective denial management:
- Analyze Denial Trends: Regularly review denied claims to identify common issues. This can help you implement targeted solutions and reduce future denials.
- Appeal Denials: Don’t hesitate to appeal denials, especially if you believe the claim was unjustly denied. Ensure your appeals include all necessary documentation and a clear explanation of why the denials in medical billing should be overturned.
- Educate Your Team: Continuous education on the latest billing and coding guidelines is essential. This includes understanding new denial codes and staying updated with changes in insurance policies.
- Use Technology: Leverage billing software and medical billing EHR systems that integrate denial management tools. These can help identify potential issues before you submit claims, reducing the likelihood of denials.
- Engage Patients: Educate your patients about their insurance coverage and potential out-of-pocket costs. This can help manage expectations and reduce the chances of a denial due to coverage issues.
Conclusion
Handling denials in medical billing can be frustrating, but the right strategies can significantly reduce them. Identify common denial reasons in dermatology, stay updated on denial codes in medical billing, and implement effective denial management practices to streamline operations and strengthen financial stability.
Reference
https://www.medicalbillersandcoders.com/blog/top-denials-in-medical-billing/
FAQ
The most common reasons for denials in dermatology include incorrect patient information, invalid or missing authorizations, non-covered services, incorrect coding, and lack of medical necessity. These issues can often be avoided with careful attention to detail and by implementing robust billing processes.
Denial management is the process of analyzing, addressing, and preventing claim denials. Effective denial management involves tracking denial trends, appealing unjust denials, educating your billing team, and implementing technology to catch potential issues before claims are submitted.
Yes, you can appeal a denied claim, especially if you believe the denial was incorrect. Be sure to submit a comprehensive appeal that includes all relevant documentation and a clear argument for why the claim should be paid.
To avoid duplicate claim denials, use billing software that flags potential duplicates before submission. If you need to resubmit a claim, make sure it is marked as a corrected claim to distinguish it from a duplicate.
Coordination of Benefits (COB) occurs when a patient has multiple insurance policies. Denials can occur if the wrong insurer is billed first or if the COB information is not accurately provided. To avoid this, verify the correct primary and secondary insurers before submitting the claim.