Top 5 Causes of Recurring Claim Errors

Preventing claim errors has always been an ongoing effort for healthcare facilities. Today, more than ever, providers are having a harder time getting paid for their services. In fact, 40% of physicians plan on focusing more on improving the billing and collections process over the next year1. Understanding the top causes of recurring claim errors is a good place to start if you are planning on revamping your RCM processes for better results. 

There are countless places where something can go wrong with a claim. In a physician's practice, it's not uncommon for a dozen people to handle some aspect of a claim from the time a patient makes an appointment until the account is paid in full. In an inpatient facility, it can be hundreds of people. It's no wonder that the claim processing cycle is preventing physicians from getting paid on time.

Then there are people at the insurance companies who determine if all conditions for payment have been fulfilled. If they make a mistake, the appeal process for a claim further slows down revenue cycle management.

Here are 5 top causes of recurring claims errors and how you can avoid them.

1. Simple Administrative Errors Resulting in Claim Rejection

A rejected claim is one that doesn't make it as far as processing due to basic errors. These basic errors include:

  • Mistaken patient demographic data
  • Incorrectly entered insurance ID
  • Omitted or invalid ICD or CPT codes
  • Treatment codes that don't match diagnosis codes
  • Missing referring provider ID number


Proofreading claims before they're submitted can catch some of these errors, as can practice management or electronic health record (EHR) software that integrates with the systems of various insurers.

2. Confusion About What Goes Where on Medicare Forms

Medicare can be one of your practice's better payers, as long as you understand and meet all Medicare specifications for claims.

One of the more common errors on the Medicare 1500 form happens in block 11. If there is no insurance primary to Medicare (which is usually the case), you have to put "none" in that space rather than leaving it blank. Ensuring that block 14 contains the proper date of initiation of care (not necessarily a date of injury or accident) is correct can also prevent CO-16 (missing or incomplete information) errors with Medicare forms.

3. Not Knowing When Preauthorization Is Required

Lack of required preauthorization can be a recurring problem that can impede effective revenue cycle management. Some practices choose to address preauthorization issues at the front end of the patient encounter, with schedulers confirming insurance coverage and determining whether preauthorization is required before the patient's appointment.

This isn't always possible in acute care situations, but having a scheduler in charge of finding out about preauthorization and starting the process can prevent headaches for you and patients later.

4. Incomplete or Erroneous Chart Notes

Incomplete notes on a patient's chart can be a serious problem when it comes to claims submission and preventing denials. I can't stress enough how important it is to have standards in place documentation.

A simple misinterpretation can make the difference between a claim being processed or denied. With the ICD-10 transition this past fall also came more rigorous specificity requirements. Accurate coding and proper payment is simply not possible if the clinical documentation isn't there to support the coding.

Physicians Practice reported that a recent study of more than 20,000 audits of physicians’ clinical documentation revealed that only 63 percent of current documentation is sufficient for ICD-10’s specificity levels. Rhonda Buckholtz, CPC, CPMA points out that the insufficient documentation often represents a larger percentage of at-risk revenue. "For example," she says "in one larger assessment, findings indicated seven of the most commonly used diagnosis codes accounted for 93 percent of the facility’s revenue."

5. Continued Use of Paper Records

Paper records and claims served admirably when there was no better alternative. Today, alternatives abound, and they're practically essential to revenue cycle management in an era when more patients have high-deductible policies and insurance company rules continue to become more complex.

The transition from paper to an EMR software can be challenging, but when coordinated by experts and accompanied by excellent staff training, the investment can quickly pay off in terms of fewer rejected and denied claims, fewer billing errors, and higher collections. 

EHR systems can make the documentation to claims submission process more efficient and ultimately improve the entire billing process. If you're still using paper I would highly advise looking into electronic alternatives to see how you can simplify the billing process and improve your practice's operations.


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