Handling Denials For No Coverage or Coverage Terminated

One of the most important parts of billing is handling denials. Many providers' offices don't handle denials and end up losing thousands of dollars a year as a result. In fact, I saw a statistic once that said that 47% of denied claims don't ever get appealed. That is outstanding! Obviously based on that statistic the insurance companies have a great incentive to deny claims.

There are three reasons that denials don't get appealed. The first is that the denial is correct and there is nothing to appeal. In that case, there is nothing to be done except bill the patient if that is appropriate. The second reason is because the person responsible for handling the denials doesn't have the time to handle them. This problem can be rectified. If the right systems for handling denials are put into place then they can be handled in less time. Most time spent on denials is figuring out what to do about them, which brings us to reason number three.

The third reason that denials don't get appealed is that the person responsible doesn't know what to do about it. Many times they understand what the denial is for, but aren't sure what steps to take to rectify it. So over the next several months we are going to be covering the most common denial reasons and how they can be handled.

One denial that is very common is "denied for no coverage or coverage terminated." Seems pretty straight forward. But what do you do? There are actually a couple of things. First of all, receiving this denial does not mean that it is correct. Our local BCBS denies claims for this reason more often than I use a restroom. Many times it is just because BCBS issued the patient a new ID number or changed just the 3 letter prefix. It can actually be quite frustrating. If we receive a denial from BCBS for this reason we go to the BCBS website and do a search on the patient. In most cases we can pull up the correct ID number and resubmit the claim.

If the denial is for a company that does not have those issues, the next thing I do is look at the patient's claim history. Has the payor been making payments but suddenly stopped? In some cases the payor may have paid claims before and after the date of service they are denying. In that case a call must be made to the insurance carrier to question the denial. Hard to believe but they actually do make mistakes! (sarcasm)

Lastly, if the denial appears correct, or if we cannot find any additional information thru the website or a phone call, then the patient must be contacted. Usually we send out a patient statement with the charges, and a note stating "Your insurance carrier states your coverage was terminated. Please contact

our office with updated insurance information." Many times patients forget to notify the provider when they do have an insurance change. Receiving a bill will prompt them to notify you. Usually they call us and give us the updated information over the phone and the claim can get resubmitted.