As a Federally Qualified Healthcare Center (FQHC) that wants to maximize reimbursement rates, it's essential to understand the difference between a claim denial and a rejection of claim. Understanding the nuances of denials and rejections dictates the best response and the likelihood of receiving reimbursement after resubmitting the claim.
Don’t abandon your claims when they need the most attention. They could create substantial revenue with a bit more work.
Many claims that are initially rejected or denied can be fixed, resubmitted, and approved if your billing team has the right strategy for each situation.
What Is a Third-Party Rejection of Claim?
A rejection of claim occurs when the request you submitted for reimbursement didn’t make it through the CMS (Centers for Medicare & Medicaid Services) claims and adjudication process.
This process involves reviewing and evaluating claim documentation to determine eligibility for reimbursement.
Claims are typically rejected early in the reimbursement process because they are incomplete, contain basic inaccuracies, or lack necessary information.
Often, these rejected claims are not even considered received by CMS or other payors, meaning they were kicked out of the process before reaching adjudication.
A claim rejection is not meant to be permanent. Typically, a few minor adjustments are all it takes to fix the errors before resubmitting the claim for payment. It’s important to note that a claim rejection is not a billed claim based on its status, and it may not be visible in the beneficiary’s insurance portal.
Knowing what to look for when claims are rejected helps you correct the claims and increase your revenue.
Steps to Rectify a Rejected Claim
- Identify the reason for rejection: Review the rejection notice to understand why the claim was rejected (e.g., missing information, coding errors).
- Gather correct information: Collect all necessary and accurate information, such as patient details, procedure codes, and documentation required to submit the claim.
- Correct errors: Fix errors identified in the rejection notice, including correcting inaccurate information and completing all required fields correctly.
- Ensure compliance with payer guidelines: Verify that the claim complies with the payer’s specific guidelines and submission requirements.
- Resubmit the claim: Resubmit the corrected claim through the appropriate channels, ensuring all necessary documentation is attached.
- Follow-up: Monitor the status of the resubmitted claim and be prepared to provide additional information or clarification if needed.
- Maintain documentation: Keep thorough records of the original claim, the rejection notice, the corrections made, and the resubmission details for future reference and audits.
Ensuring all necessary information is accurate and complete can significantly increase the likelihood of claim approval upon resubmission.
What Is a Claim Denial?
A denied claim, on the other hand, has successfully passed through the adjudication process, but the payor decided not to pay the claim.
Third-party payors deny claims after reviewing them and determining they do not meet the necessary payment criteria.
The third-party payor will not remit payment for the services provided. They may present their decision as final, but FQHCs who track denials can always appeal this decision.
When a claim is denied, third-party payors will not send payment or contact you again about the claim. This means if you are not closely watching your denials, you will lose revenue that is actually billable.
Tracking denials and quickly appealing them can significantly improve revenue, especially if denied claims have not been closely monitored in the past.
Steps to Rectify a Claim Denial
- Identify the reason for denial: Review the denial notice to understand why the claim was denied (e.g., lack of medical necessity, coding errors).
- Gather necessary documentation: Collect all supporting documentation, such as medical records, physician notes, and authorization forms, that may be required to address the reason for the denial.
- Correct any errors: Fix any mistakes identified in the denial notice, ensuring that all information is accurate and complete.
- Submit an appeal: Prepare and submit an appeal letter to the payer, providing a detailed explanation and supporting documentation to justify the claim.
- Follow the payer’s appeal process: Ensure that the appeal follows the payer’s specific procedures and guidelines, including deadlines and required forms.
- Track the appeal status: Monitor the appeal's status and be prepared to respond promptly to any additional information requests from the payer.
- Maintain detailed records: Keep thorough records of the original claim, the denial notice, all communications, and the appeal submission for future reference and audits.
If the appeal is unsuccessful, the claim remains denied and is non-reimbursable by the payor. Typically, the patient will see the denied claim in their insurance portal and receive a letter from the third-party payor explaining why it was denied.
How Altruis Can Help Reduce Claim Denials and Rejections
Every denial or rejection of claim represents an opportunity to improve your bottom line. Altruis helps FQHCs create a process to quickly and appropriately respond to rejections and denials, thereby maximizing reimbursement.
Our proactive approach helps your team understand the reasons for rejections and denials so they can quickly resubmit a corrected claim.
Altruis believes that every rejected claim can become a source of revenue. By proactively addressing the reasons for rejection promptly and accurately, you can process more claims successfully.
We can help your FQHC:
- Proactively reduce the number of rejected and denied claims
- Prevent rejections and denials from falling through the cracks
- Strengthen your revenue cycle management process.
Take the first step towards maximizing your billing revenue by scheduling a free billing assessment today.
