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Cleaning your claims: How to improve your chances for prompt payment

Experts offer tips on getting your reimbursement forms complete and correct the first time, which should speed insurance payments.

By Jonathan G. Bethely — Posted Aug. 21, 2006

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For the last decade or so, just about every state legislature has adopted or refined laws that mandate insurers pay promptly for "clean claims" -- ones that contain all the necessary information when the physician sends it to the health plan.

And yet, physicians complain that health plans still find ways to delay payment past the 15- to 60-day windows set by most state laws. Physicians say plans haggle over typographical errors, demand extra information after submission, or otherwise find petty ways of delaying payment. A survey by Athenahealth, a Watertown, Mass.-based claims-processing company shows that, indeed, not all plans process claims at the same speed.

Health plans, however, maintain they pay clean claims on time, and that any payment problems stem from physicians filling out forms incorrectly or sending claims in late. According to a study conducted this year by America's Health Insurance Plans, 29% of physician claims were submitted more than 30 days after the point of service, and 15% were submitted more than 60 days after service.

One point both sides can agree on is that even when laws state a deadline for paying "clean claims," they don't define what a "clean claim" is. The AMA is among many medical organizations calling for, and working for, changes in laws to close the loopholes that let insurers define it at will.

Meanwhile, consultants suggest practices submit claims as soon as possible after the patient visit, and they note that the longer the delay, the more likely an error will be included.

Practices should use original claim forms, with entries typed, not handwritten, and sent with no folds. If mistakes are made on the original paper claim, tear it up and start a new form; don't attach sticky notes or use correction fluid. And don't use paper clips or staples. Insurers often hold how-to workshops on successful claims filing that physicians, or their staffs, can attend.

Start at the beginning

Overall, the key to submitting a clean claim starts with having an effective procedure, communicating it to employees, and following it, said Joyce Borton, manager of systems and training at Metro Heart Group, a 22-physician group in St. Louis. She said it's also helpful to create a goal-oriented atmosphere. For instance, her team sets monthly percentage goals for first-time claim approvals.

Borton said the process of submitting a clean claim starts when the patient schedules an appointment. The scheduler should make sure the patient's personal and insurance information is current and correct. Borton's office came up with a registration form that lists every item needed for a standard claim form.

Your office e-mail system can be set up to include a group message list that employees responsible for filing claims can use to share information, Borton said. For instance, if someone notices a particular code has a pattern of being rejected, a group e-mail can alert other employees. If your practice does not have e-mail, create a shared internal document book to communicate this type of information.

Practices should also keep track of other trends in claims rejections, so if the same problem occurs repeatedly, it can be addressed.

"I've given [staff] a lot of little cheat sheets on insurance plans to make sure that when they enter the insurance plan, they've entered the right one," Borton said. "If you're re-filing a claim over and over again, that's lost money. Ultimately you're going to get it, but it may take two or three months."

According to AHIP, nearly 50% of all pending or delayed claims were returned because of submission of duplicate claims, incomplete information or invalid codes. On average, AHIP says pending claims require an additional nine days to process.

"What's important for physicians to note is that they must make sure all the necessary information is on the form or on the attachments, thereby reducing the need to ask for more information," said AHIP spokesman Mohit Ghose. "Only clean claims are actionable."

Deborah Fisher, senior business analyst for WellPoint's electronic data interchange, said her company's No. 1 reason for sending claims back is coding errors. So it's important, Fisher said, for physicians to keep up to date with code changes.

Need some help?

Many physician practices hire a clearinghouse to do claims editing, in hopes of ensuring -- although not guaranteeing -- a clean claim submission. The cost of hiring an outside agency varies widely. Some companies provide the service for free while others charge a per transaction fee, usually 50 cents to $1 per claim. Other services charge a monthly fee for unlimited claims.

Rosemarie Nelson, a principal consultant with the Medical Group Management Assn., said physicians who don't have an in-house practice management system should pay for claims processing. "When you've submitted a paper claim that has to be handled by [another] person, you've created the opportunity for error."

Nearly 75% of claims processed in 2006 were submitted electronically, up from 44% in 2002, according to AHIP. Many insurers say the number of first-time rejections has decreased as a result of electronic claims processing.

But technology is not a cure-all, and electronics can be more complicated than paper. Paper claims have nearly 34 fields that need information, ranging from physician ID numbers to member's benefit information. An electronic claim form has more than 800 fields, though most have to be completed only at the patient's first visit.

The National Uniform Claim Committee, a volunteer organization of health care industry professionals chaired by the American Medical Association, has been tapped to change the paper claims form for the first time since 1990. The most significant change will come as a result of the new national physician identification number required under the Health Insurance Portability and Accountability Act. The new form is scheduled to be available to physicians in October.

Cleanliness is next to ...

Insurers say that, contrary to what many physicians might think, they also have a vested interest in receiving clean claims on the first try.

For one thing, it's cheaper. According to AHIP, processing a clean claim electronically on the first try costs 85 cents, versus $2.05 for processing a pending electronic claim that requires manual or other reviews.

Even though insurers maintain that newer technology has created edits that can weed out potential errors in a claim, the AMA reported in 2003, after the edits were introduced, that there was an increase in complaints from physicians regarding inappropriate claims denials and reductions.

Physicians complain that insurers are citing coding errors not because the claims are coded incorrectly based on the medical care or services physicians have provided, but that they're coded "incorrectly" based on what insurers are willing to reimburse.

If at first you don't succeed

So what should a physician do when a claim is repeatedly rejected and there appears to be nothing wrong? The main advice: Don't ignore it.

Experts say some insurers are counting on doctors figuring that the cost of chasing down a claim is more than the potential reimbursement.

A physician's first step, Nelson said, should be to file an appeal with the insurer's provider relations department. She also suggests contacting the state's department of insurance.

The AMA suggests physicians use the health plan's appeals process whenever possible because it alerts the insurer about potential problems in the editing software that might need to be corrected.

The Association also suggests practices audit health plan payments to determine whether the reimbursement rate is accurate for each claim submitted.

Physicians can alert the AMA about payment problems by phone or by filling out a health plan complaint form found on the Association's Web site (link).

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ADDITIONAL INFORMATION

Why claims are denied -- what insurers say

An America's Health Insurance Plans' report from their member companies lists the reasons claims aren't accepted as clean:

Reason
Duplicate submission 35%
Lack of necessary information 12%
No coverage based on date of service 8%
Non-covered/non-network benefit or service 7%
Coordination of benefits 5%
Coverage determination 4%
Utilization review 3%
Authorization 3%
Preexisting condition review 1%
Invalid codes 1%
Other 21%
100%

Note: Other reasons include: Medicare as primary provider, incorrect provider ID, no physician, ineligible physician and possible third-party liability.

Source: America's Health Insurance Plans

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Principles of documentation

  • Medical record should be complete and legible.
  • Documentation of each patient encounter should include: date; reason for the encounter; appropriate history and physical exam; review of lab, x-ray, and other ancillary services; assessment; and plan for care.
  • Past and present diagnosis should be accessible to the treating and/or consulting physician.
  • Reasons for and results of x-rays, lab tests and other ancillary services should be documented or included in the medical record.
  • Relevant health risk factors should be identified.
  • Patient's progress, including response to treatment, change in treatment, change in diagnosis and patient noncompliance, should be documented.
  • Plan for care should include, when appropriate: treatments and medications, specifying frequency, dosage; referrals and consultations; patient/family education; and follow-up instructions.
  • Documentation should support the intensity of the patient evaluation and/or treatment, including thought processes and the complexity of medical decision-making.
  • All entries to the medical record should be dated and authenticated.
  • The CPT/ICD-9 codes reported on the health insurance claim form or billing statement should reflect the documentation in the medical record.

Source: From a 2003 AMA publication, "Appeal that claim"

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Get ready for new uniform claim forms

Soon the 1500 Health Insurance Claim Form will be released in a modified form, the first such change since 1990. The biggest part of the change comes as a result of the Health Insurance Portability and Accountability Act, which calls for every physician to be assigned a new identification number to replace those previously assigned by individual insurers.

The National Uniform Claim Committee, a volunteer organization of health care industry professionals chaired by the American Medical Association, was tapped to oversee the changes. The new modified form will be introduced in two phases. Beginning Oct. 1, health plans, clearinghouses and other information-support venders should be ready to accept the revised form. Between Oct. 1 and March 31, 2007, physicians can use the current version or the revised version. Starting April 1, 2007, only the revised form should be used.

The NUCC does not have enforcement powers, so adherence to the schedule will strictly be voluntary.

NUCC officials suggest physicians contact insurers to verify if they are ready to handle the revised forms.

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