The increasing number of medical coverage plans offered by health insurance companies has complicated the process of medical billing. The complexities of the process can give rise to medical billing errors that can lead to claim denials.

Medical billing denials occur when the insurance company or payer refuses to honor a request by an individual to pay a healthcare provider for the services they have rendered.

Managing denials is one of the most frustrating tasks that your in-house medical billing team can experience. Not only can it waste your valuable time that you could have dedicated to your patients, but it can cost you a lot of money as well. Some frequent causes of denials in medical billing include incomplete information and errors in billing.

Here are some steps that you can take in effectively managing denials:

Educate Your Staff

Your in-house medical biller is primarily responsible for filing claims and managing denials. Therefore, it is imperative that he/she has the necessary training on the steps they need to take to appropriately handle denials. This will help you avoid denials.

However, if your claim does get rejected over missing information, your staff should be quick in contacting the patient so that the matter can be resolved on an immediate basis.

Respond Quickly

Timing is one of the key factors in managing denials. If you promptly respond to denials, there is a high chance for you to receive your claim. Your office should have a structure in place to forward denials to the appropriate person. It is preferable that you have an automated system for placing denials into work as this is the quickest method. However, in case you don’t have an automated system, you may respond via email or letter. A lot of insurance companies do offer a time window, but it is quite short. Hence, it is imperative that you act quickly to get your reimbursement.

Keep Proof of your Document 

It is a highly recommended practice to keep a copy of your document submissions and changes as proof. When you file a claim electronically, you can simply print out a copy of the report. This way, you can keep a record of the information on the claim you submit, such as the date, medical codes, etc. For example, in case the payer denies your claim for late submission, you can use this copy as proof and appeal for reimbursement.

Raise an Appeal 

If the health insurance company refuses to pay a claim, then you can use your right to appeal and ask the payer to reconsider its decision. This appeal will be reviewed by an external party. The policy requires insurance companies to provide you with a reason why your claim was denied. The insurer will also have to brief you on how you can dispute their decision.

Generally, there are two ways to appeal a medical claim denial:

  • Internal Appeal: The right to an internal appeal means that you can request the insurance provider to thoroughly review their decision and fair manner. You can also ask the insurance company to expedite the process if your case is urgent.
  • External Review: You can also take your appeal to an external party for review. In an external review, the insurance company does not get to make the final decision on whether to pay a claim.

Track Appeals to Ensure Payment

Following up on appeals is an important step in managing denials. If your appeal is denied, then it is time for you to proceed to the next level of appeal. If you find that a particular service is always denied by the payer, then you should work to establish the root cause. Some key questions that you need to ask are:

  • Are the services reported using the method indicated by the payer?
  • Does the contract with the payer outline why the denied service(s) is always included with another service?

Setting up an appeal tracking system will help you to identify patterns of medical billing denials.

Develop a Tracking System

A tracking or reporting system can be used to conduct insightful analysis. Your objective should be to collect data that you can work on in the future to implement improvements to your existing procedure. For instance, if you have your office in multiple locations and one particular location has significantly lower medical billing denial rates, then you can scrutinize their procedures to improve performance at other facilities.

Contact the Patient

If the cause of the denial is the termination of the patient’s insurance coverage, then it is best to get in touch with the patient. It is often the case that patients fail to notify your billing staff when they have an insurance change. Receiving a call from your office will prompt them to inform you of any such change. Once you have the updated information, you can resubmit your claim and receive your money.

It is crucial that you develop a system that you will use every time you receive this form of denial. This will allow you to save time in figuring out what to do and the denial can be resolved quickly.

Partner with a Medical Billing Service

Medical billing services have automated software that optimizes the process of managing denials and uses algorithms to perform predictive analysis. This helps to identify claims that can possibly be denied and address the errors before submission. An efficient clearinghouse will also help you to speed up the process of resolving denials.


May healthcare providers, including doctors, physicians, and hospitals lack the skills and expertise required to effectively manage denials. With constantly changing government regulations and payer policies, it can be a smart and profitable move to outsource your medical billing to experts, such as PCS – Revenue Cycle Management. Their highly trained, experienced, and specialized team will ensure that your denials reduce by 80% so that you no longer have to bear the additional responsibility. This means now you can better focus on providing your patients with the dedication and attention they deserve!

To learn more about how PCS – Revenue Management Cycle’s medical billing services can help you decrease denials and enhance your practice, visit our website or call us at 281-937-4089

Talk to Someone Who’s Been There. Talk to Someone Who Can Help. Scottsdale Recovery Center holds the highest accreditation (Joint Commission) and is Arizona’s premier rehab facility since 2009. Call 602-346-9142.