So, You Got a Claim Denial. Now What?

Unless you’re on a lucky streak that could rival a leprechaun’s, chances are, you’ve received a claim denial at some point. And you may be tempted to simply sweep those denials under the rug, never to be seen again. After all, a denied claim here or there isn’t a huge deal, right? Well, not quite.

Denials can seriously add up—and have a seriously negative impact on your bottom line. So, it’s critical that you address any denials you receive as quickly as possible. Here’s how:

First, confirm that the claim was actually denied—not merely rejected. What’s the difference?

Rejected claims:

  • Have invalid or missing data elements.
  • Are returned to the provider without being registered in the payer’s claim processing system.

Denied claims, on the other hand:

  • Occur after the carrier receives and acknowledges the claim.
  • Typically result from errors.

You’ll know your claim was denied because you’ll receive notification on the electronic remittance advice (ERA) or explanation of benefits (EOB).

Now for the important part: Resolving outstanding claim denials. Again, it’s imperative that you do this ASAP, because the longer you wait, the lower your chances of recovering any payments that you should have received. Here are the steps you should follow:

  1. Identify the error code, which is usually found on the ERA or EOB.
  2. Contact the payer to clarify the reason for the denial.
  3. Follow the payer’s instructions for correcting and rebilling the claim.
  4. Make sure you document this conversation in your EMR system—along with any other interactions you have regarding the claim.

If you don’t agree with the payer’s final determination—for example, if you correct a claim, rebill it, and still receive a denial—then you can submit an appeal. In these situations, you should appeal the claims within seven days of the payer’s final determination, as you’ll have a 67% chance of getting paid. Conversely, if you wait any longer, then denied claims have a 60% chance of not getting paid (and those are not good odds). So, act fast. Lastly, if you need to appeal your claim, make sure you provide the payer with:

  • a clear narrative,
  • documentation of all interactions you’ve had with the payer in relation to the denial, and
  • all related patient documentation. (This is yet another reason to ensure all therapists in your practice are documenting defensibly.)

Remember, defensible documentation supports a provider’s decision to not only provide specific services, but also bill for them. So, in an appeal situation, defensible documentation will be your best weapon (and shield). Furthermore, strong documentation can often mean the difference between receiving a claim acceptance and a denial in the first place. For more defensible documentation tips—including a downloadable checklist—check out this blog post.

Looking for more advice on how to deal with denials—and more importantly, stop them from happening in the first place? Be sure to watch this free denial management webinar, hosted by rehab therapy billing expert Diane McCutcheon and me.