Insurance Claim Denial

4 Reasons Your Claims Are Being Denied

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Insurance red tape is the bane of any physical therapy owner’s existence. You’re planning for the income; but instead, you get notified that a claim was delayed or denied. This is why: instead of managing billing claims yourself, you should leave it to a professional PT billing and collection service so you can spend time doing what you’re really passionate about – treating your patients and running your business.

Here are the most common reasons Physical Therapy Claims get denied and how you can avoid getting stuck in the never-ending cycle of insurance red-tape: 

Billing Errors

People who fill out claims can sometimes make mistakes. Unfortunately, mistakes are often the reason that claims are denied. The simplest data entry errors, such as spelling a name wrong or switching numbers, can result in flat denial. Unfortunately, that leaves you with no recourse until a new claim is submitted. According to the APTA, the Government Accountability Office found that “billing errors, such as duplicate claims and missing information on the claim – result in more private insurance claim denials than judgments about the appropriateness of services.” Making sure claims are clean and not duplicate claims is the easiest way to ensure that claims are approved. 

Mixing up Insurance Companies

Your practice likely deals with anywhere from a handful to dozens of insurance companies, which can be confusing and overwhelming. Often these insurance companies branch out into subsidiaries or small groups. Thus, if you submit a claim to Insurance company A, but it needed to go to Insurance B, that claim won’t go anywhere. Chances are you probably won’t hear from Insurance A, and then you’ll be wasting time following up on a dead claim. A good rule of thumb is to always ask for a copy of the patient’s insurance card and to submit claims to the address on the back. You can also verify a claim address and/or payer ID when obtaining the verification of benefits.

Medical Necessity

Insurance companies don’t want to pay if they don’t have to. Unfortunately, when it comes to medical necessity, there’s little consensus among payers as to how medical necessity is defined for its beneficiaries. So it’s no wonder that denials for medical necessity are all too common in the PT world. For instance, all services billed to Medicare must meet the criteria of “medically necessary and reasonable.”CMS defines medical necessity as:

  • Be safe and effective;
  • Have a duration and frequency that are appropriate based on standard practices for the diagnosis or treatment;
  • Meet the medical needs of the patient; and
  • Require a therapist’s skill.

Medical necessity varies across the board, but in general, therapists must be able to defend treatment decisions. In order to do so, clinicians should be sure to document every encounter, make sure the documentation is legible, include standardized tests and measurements, record progress, map out measurable and specific goals, and justify the treatment plan through evaluation of specific limitations and functional deficits. The APTA has stricter guidelines for medical necessity which can be found here or contact other insurance carriers directly for specific questions regarding their medical necessity guidelines.

Duplicated Claims

Mistakes happen – the same treatment gets submitted multiple times, or gets resubmitted when it has already been paid. When this happens though, most insurance companies will simply deny everything because of these multiple claims for the one treatment. This requires you to start over again which costs time… and time is money. Especially when you’re not getting paid. Paying attention to detail and being aware of what’s already been submitted will help avoid this from happening. If you are ever in a situation where you need to make a change and resubmit a claim, always verify with the carrier if a clean claim can be submitted or if you need to send a corrected claim. Most insurance carriers require the latter, with a resubmission code 7.

Listen, you went to Physical Therapy school to be a therapist, not a biller. Leave the tasks of billing and collections to those who are professionals. By outsourcing your billing and collections, you can rest assured that professionals who understand the intricacies of physical therapy billing will have your best interest at heart and will go to bat for every penny you’ve earned. Then you can go back to being an executive over your practice, and your staff can focus on best serving your patients. Contact us directly to learn more about our billing solutions for physical and occupational therapy private practices.


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