| Survey
Finds: Denials A Costly Problem For Physicians, Insurance Companies At
Fault
Claim denials are cited as a major problem for
90.2 percent of providers who responded to the "Managed Care Leadership
Survey on Managed Care Claims Payments" survey.
The survey, conducted by the Managed
Care Information Center, found on average 13 percent of
respondent’s claims are denied.
"This is a sensitive subject for most providers
because they basically want to be paid for the services rendered in
full and on time," said the regional director of an MCO.
The director of a contracted care organization
found denied claims are costly "especially when unfounded because they
are a very, very expensive proposition. Each is labor intensive and
often the stakes are very high for the provider."
The senior vice president (SVP) of business
development for a consultancy company agreed and said denied claims
cause office productivity hits due to re-working claims.
Of those who indicated claim denials to be a major
problem, 39 percent said physicians experience more difficulty with
denial-associated problems, 7.3 percent noted hospitals and 43.9
percent believe both are subjected to the negative aspects of a denial.
"Most physicians do not have the staff needed to
field the issues of denied claims. There is usually no clear way of
doing reviews by a good number of managed care denials. They often
involve loads of extra paperwork in locating the problem or informing
the insurance company that the claims should not have been denied.
There are a lot of cases where denied claims are incorrectly denied at
the insurance level and then the physician has to wait 30 days or more
to fix the issue," said a billing manager.
"Managed care companies are linking denials to
both the physician bills and hospital bills. For example, if a hospital
claim is billed without an authorization, the physician bill will also
be denied for lack of hospital authorization," said a denials analyst
from St. Joseph’s Hospital of Atlanta, Ga.
"However, I have also found that a hospital may
not require an authorization for an emergency department visit and
associated radiology services, but the physician billing for reading
the radiology scan may get a denial for no authorization," the denials
analyst continued.
One director of contracted care for an integrated
health system suspects claim denials to be less of a problem for
hospitals due to their heavier clout than physicians.
"For hospitals, generally denials come most often
in response to high dollar claims. Consequently, we can and do
challenge each and every one making the cost to us and the payor
increase. For example, in physician practices the claims are quite
regular and seem to be a measure of wills. If the practice challenges
the denials regularly, the payor reduces the frequency of denials
because of the costs and low return," the director said.
The majority of respondents pointed the finger of
blame to the insurance companies, citing their efforts to be
complicated, unruly, inconsistent and lacking important communication.
"Payors keep changing the rules, once we fix the
problem with last month’s denials they start denying
something else," said the director of Central Business Offices, a
physician organization.
One of the modern stipulations for reimbursement
is medical necessity.
"The payors are applying medical necessity
standards that are not communicated in written or verbal form to
providers. In the past the issue was authorization. Today you can have
a valid authorization and still not get paid," said the administrator
for a physician organization.
The denials analyst from St. Joseph’s
Hospital said "due to complicated managed care contracts, ambiguity and
technicalities, claims are processed incorrectly and MCO customer
service quality and training is poor," causing problems in trying to
prevent or correct denied claims.
Another respondent believes the claims are being
denied because of electronic submission.
There is "too much reliance on computer software
and codes. No human actually looks at claims that are denied. It is
easier to deny them and then have the provider do the research as to
why they should be paid," the president of an independent medical
management company said.
"The main problem is that there is no moral
incentive anymore in the insurance industry. It is only the economic
incentive that drives the insurance business," a clinical professor at
a medical university said.
The professor suggested "getting rid of the profit
incentive in health insurance so that the only decision that needs to
be made is if the reimbursement is appropriate,"
Outside of insurance companies at fault, it is the
provider’s team seemingly road-blocking correct
reimbursement.
"From a provider perspective, I would like to
blame it on the MCOs. However, I believe the physicians and problems
with coding are the primary cause. Then, when claims are denied they
aren’t appealed and the initial cause isn’t fixed,"
said Jeff Milburn, a consultant for MGMA Health Care Consulting Group.
A concern among a few respondents was the lack of
staff to handle denied claims and appealing them.
A claims manager from an MCO cites not having a
fully trained staff to "analyze internal reports of denials by
providers in our network with sizable volume of denials to assist and
educate concerningclaims filing issues."
Lack of education is another cause of denied
claims, the survey found.
The assistant vice president of an MCO said there
is "billing issues using national guidelines. Providers are not
following or may not understand or keep up to date with changes in
billing guidelines."
The SVP accredited denials to a lack of expertise
on both sides because of "inadequate knowledge and systems on the
provider side that are limited to no flexibility on payor side to
automate new business rules/contracts."
Address: Health Resources Publishing, Managed Care
Information Center, 1913 Atlantic. Ave., Suite 200, Manasquan, NJ
08736; (732) 292-1100, www.healthresourcesonline.com.
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