11 Claim Denial Management Solutions to Improve Your Bottom Line


Researching and re-submitting denied claims is a time-consuming and frustrating process. It’s critical to have a claim denial management strategy in place to quickly identify, resolve, recover, and prevent denied claims. The longer you wait to resubmit denied claims, the higher the odds are you won’t recover the maximum amount from the insurance payer. Or worse...you won’t get paid at all!

The average claim denial rate in the healthcare industry is 5-10%, and about two-thirds of denials are recoverable. The good news is that nearly 90% of denials are avoidable.

How can you keep the claim denial rate below 5% and boost unhealthy cash flow? Let’s look at common claim denial management struggles, and how proactive solutions can improve your bottom line.

What is a Denied Claim?

Medical claim rejections and denials are often used interchangeably—however, there is a distinct difference. Before we get into a claim denial management strategy, first it’s good to remember the basics of what a claim denial means to your eye care practice.

A rejected claim contains one or more errors and fails to meet specific formatting, optometry billing and coding criteria, and data requirements.

Because a rejected claim has never been processed by a clearinghouse, insurance payer, or the Centers for Medicare & Medicaid Services (CMS), the claim is not considered received, and it did not make it through the adjudication system. Once you correct the errors you can resubmit the claim.

A denied claim is lost or delayed revenue to your practice. The claim has been received and processed by the insurance or third-party payer, but it has been deemed as unpayable for services received from a healthcare provider.

Payers will send you an Explanation of Benefits (EOB) or Electronic Remittance Advance (ERA) that explains why the claim was denied. Before you resubmit the corrected claim, you must determine why the claim was denied and correct the errors.

“Fast Pay Health is skilled in identifying and correcting problems and putting systems in place to prevent future errors.” – Julie Honda, OD (Kailua-Kona, HI)

Common Struggles with Claim Denial Management

You and your staff can spend hours each week analyzing unpaid claims and EOBs to determine the necessary steps to correct and reprocess denied claims. It can take anywhere from five minutes to one hour, or more, to research the reason and solution for the claim denial.

Once the insurance payer denies the claims, most set time limits on resubmitting a claim. If a patient has secondary insurance, you can run into timely filing denials.

“We had many claims we had to write off because they were too old and couldn’t be rebilled. Our medical receipts are so much higher now that we outsource our revenue cycle management, so it’s worth every penny.” – Joanne Gronquist, OD (Santa Barbara, CA)

According to the Medical Group Management Association (MGMA), the average cost of reworking a rejected or denied claim is $25. And 50-65% of denials are never reworked due to lack of time or knowledge on how to resolve the claim.

AAPC provides a free denied claims calculator to show what those reworks are costing you using the $25 MGMA average cost. Use this handy online tool to “calculate your potential cost from denied claims” and “estimate your income potential from re-worked claims.”

11 Claim Denial Management Solutions to Implement Today

Claim denials fall into three categories: administrative, clinical, and policy. A majority of denied claims are administrative errors and once corrected you can resubmit them to the insurance payer. Denied claims with a clinical reason may require you to submit an appeal letter: always send this by certified or registered mail.

One of the first steps in managing denied claims is to identify the reason for the denial and determine what steps you need to take to appeal the claim. Create a comprehensive workflow that can track your claims as they enter and leave your system.

The key takeaway is don’t delay—begin working on resolving the issue(s) immediately and review, correct, and resubmit denials within the week.

Let’s review some common reasons for claim denials, along with solutions to help you improve your process and your bottom line.

1. A duplicate claim was submitted for the same service or procedure.

Before you re-file an unpaid claim, always check with the insurance payer first since they may be processing the claim. Find out why the claim wasn’t paid or if the clearinghouse rejected it.

2. The patient isn’t eligible for services due to the health plan coverage ended.

Always check the patient’s insurance card at the time of check-in and confirm coverage. Copy both sides of the patient’s insurance card to ensure that you have the correct claims filing address and important information.

3. The physician isn’t an in-network provider.

Make sure the provider has been approved by the insurance carrier. Submit and track provider credentialing applications based on insurance plan requirements. Follow-up with insurance payers regularly to make sure the providers are enrolled in-network when enrollment is open.

4. Missing or invalid patient demographic and insurance information.

Always confirm the spelling of the patient’s name, date of birth, responsible party, and vision and medical plan numbers. Even one required field will trigger a denial.

5. The benefit exceeds allowed number of visits or services.

Always confirm the patient’s eligibility with the insurance payer. Many insurance payers only allow a certain number of visits or services that are covered within a calendar year.

6. The claim requires a prior authorization number.

Verifying a patient’s insurance benefits is a critical first step in the RCM process. Whenever possible, obtain authorizations from the insurance payer before the patient visit. Before submitting any claim, double-check that the prior authorization number is included on the claim.

7. The claim is missing a code, modifier or the modifier is invalid.

Payers will reject your claim if even one of the procedure codes is inconsistent with the modifier used, or a required modifier is missing for the date of service being billed. For example, never attach modifier 59 to an E&M service. Depending on the local policy, if the tests are necessary due to two separately identifiable conditions, you may be able to link the appropriate diagnosis and procedure code and add modifier 59 to the second procedure.

8. Services should have been billed separately and not bundled.

There are some services you can’t file separately and may require bundling, such as laboratory profiles with multiple tests or an all-encompassing rate that covers the minor procedure and the pre- and post-procedure visits.

9. The place-of-service (POS) doesn’t match the procedure performed.

Correct the POS code or CPT® code and resubmit the claim. Make sure the POS matches the setting where the patient received the service (face-to-face services) or the setting where the technical portion of the services was delivered (non face-to-face services, such as the interpretation of diagnostic test results).

10. Service isn’t covered under the plan’s benefits or isn’t medically necessary.

Check your Local Coverage Determinations (LCD) policies on the insurance payer’s website for a list of covered diagnoses.

11. The filing deadline (timely filing) has passed.

Pay close attention to the permitted time frame—each insurance carrier has its own guidelines. Sometimes you only have up to 30-90 days from the date of service to submit a claim, or it will be denied and you can’t bill the patient or appeal to the insurance company.

“We’ve been in business since 2007 and never received any payments from Medicare until Fast Pay Health stepped in to help us.” – Shari Tullo, Practice Manager (Princeton Optometry, Princeton, NJ)

Invest in a Solid Claims Denial Management Solution

The best revenue cycle management solutions pay close attention to credentialing, eligibility verification, charge entry, coding, and claim submission requirements before you push the “Send” button.

Fast Pay Health billers make sure your claims are scrubbed clean and are free from errors before we submit them—decreasing claim denials and delivering a consistent and positive cash flow for your practice.

Request a free practice analysis today and start enjoying the advantages of cleaner claims that focus on improving the financial health of your eye care practice.

Related: 11 Tips That Will Make Your Medical Claims Cleaner and Improve Cash Flow

Related: 6 Eye Care Billing Rejections You Can Overcome

Related: How to Reduce the Accounts Receivable Cycle with Smarter Billing