While a single denied insurance claim may just be a blip across your practice’s day-to-day operations, a systemic and growing trend of denied claims can cost some serious time and money.
Let’s look at how claim denials happen, what their cost is over time and how you can combat it as a business owner.
What is an insurance claim denial?
A claim denial is when an insurance claim is rejected after being received, usually due to errors. A claim denial differs from a rejected claim, where the claim does not enter registration in a claim process system. The timing is the crucial difference here: a claim can be registered but then denied. A rejected claim does not even get processed.
Insurers can deny claims during processing for multiple reasons. One of the most common is a billing error where inconsistencies, such as duplicate claims or missing information, result in denial. Eligibility issues are also a common cause of claim denial.
A sudden claim denial can be an inconvenient, costly mistake not only for the patient but for the physical therapy practice as well.
What are the numbers on the costs of denied claims?
A single denial can affect profits, but continual denials due to errors can significantly drain time and money affiliated with a physical therapy practice.
According to NCG Medical, the average cost to file a claim is $6.50. A percentage of those claims can be rejected outright due to minor errors. That means a claim that should have cost $6.50 to file would cost an additional $25 to resubmit on the low end. Some sources indicate a resubmission could cost as much as $118.
If your billing and collections process for insurance claims is faulty and prone to errors, that could lead to substantial costs in time and money month to month – not to mention the effect on patient satisfaction as they worry about the cost of healthcare.
How do I prevent denied insurance claims at my PT practice?
Instead of falling into the trap of resubmitting and appealing denied claims, adjust your physical therapy company’s systems of operation to avoid this altogether and save money in the long run.
One way to prevent these errors is to work with a dedicated team of private practice billing experts rather than building a billing team from within the practice. Some physical therapy offices will try to save on costs by handling their billing needs internally. While that may work for a while at a small scale, eventually, the billing needs outpace the processing ability of the team.
This necessitates hiring to expand and remove the cost of training (and retraining). Now factor in the costly process of making up for denied claims during the growing pains of an internal billing department. This is where the value of an outsourced billing and collections agency comes in. Their trained experts can handle those issues for you and provide far more accurate claims that are denied far less!
Learn more about improving your billing and collections
MEG Business is a dedicated team of practice management advisors who teach business success and provide resources essential to physical therapy practices. MEG Business helps businesses thrive through expert guidance and reliable consultations.
If you are curious how MEG Business can help you reduce costly denied claims, request a free billing consultation today.