The Impact of rejected claims on your profits.
Rejected medical aid claims are potentially the greatest threat to a practice’s cash flow and revenue. The chances of getting a patient to pay you for a claim that they believed was going to be paid by their medical aid are slim, and the amount of time it takes to follow up on rejected claims often results in practitioners either writing the amounts off or forgetting that the account is overdue.
Sadly though most claim rejections come down to capturing errors and can happen to even the most well trained and experienced people. We can try to avoid these error’s but mistakes can creep in and these small mistakes can add up to large amounts of money. However by putting a few simple processes in place you can reduce and possibly avoid some of the most common mistakes.
Do you know how much money you are losing because of rejected claims?
I know that some of you are thinking “come on, can a few claims really be that bad?”, the answer is yes they can be. A client of ours was seeing a set of siblings and on every second or third session there was a line item rejected by the scheme. Our client thought well its only a small amount and the parents are struggling so I will just write it off, by the end of the year she had written close to R 30,000.00 off for just this family.
Its easy to think that on a remittance where you have been paid R 20,000.00 that the R 80.00 that wasn’t paid is a small amount, but over time that amount grows.
Let’s take a closer look, you can use this simple calculation to estimate how much you are potentially losing.
- Work out how many claims you submit each month and then the average amount per claim.
- Estimate your rejection rate, the average for allied therapists is between 10% and 15%.
- Multiply the number of claims by the average claim amount, then divide that by the rejection rate.
But lets be fair, if at least two thirds of those rejected claims are recoverable then the practice stands to lose R 4000.00 per month or R 48,000.00 annually. This is a massive loss for a healthcare practitioner in private practice.
There are many reasons that a claim might be rejected so lets take a closer look.
| Rejection Reason | % Rejected in 2020 |
|---|---|
| Incorrect date of birth | 14.31% |
| Member number not found in the selected scheme. | 13.42% |
| Invalid dependent code | 10.27% |
| Stale Claim | 6.91% |
| Invalid ICD-10 code in claim diagnosis | 6.64% |
| Membership is invalid | 5.34% |
| Benefit does not cover treatment type | 5.34% |
| Member or dependent not active on service date | 4.93% |
| Duplicate claim line | 4.52% |
| Dependent details invalid | 2.87% |
| Invalid referring provider | 0.96% |
What we can see from the above table is that many of the rejections are avoidable if you validate the patient’s information before submitting your claims. This will save you time and money in the long run.
Here are some ways that you could actively reduce the number of rejected claims, remember that prevention is better that cure, and its cheaper to get it right first time than to have to follow and and issue amended claims.
- Get rid of hand written intake forms, the chances of capturing details incorrectly because you are trying to decipher someone’s handwriting will result in rejected claims. Look into ways that you can digitize your intake and consent forms and send them to the patient ahead of the session. For more information on online intake forms you click here
- Once you have the forms, you are also able to do a verification with the patients medical aid to make sure that the information that you have matches the information the medical aid has. This will reduce claim rejections for invalid membership numbers, date of births and dependent codes. As well as advise if the membership is active, suspended or in a waiting period ahead of the first session with the patient.
- Use invoice templates, your billing software should allow you to make use of pre-populated templates for your invoicing and claims submissions. By using templates you can customize them to your specialty and set them up with your most used billing codes, this means that you are far more likely to submit claims with the correct line items and reduce the number of potential rejected claims.
- Submit claims using EDI , claims submitted using EDI, give you a near immediate response. If a claim is rejected for any reason you will know instantly and can amend the claim and resubmit it there and then.
Is there anything else I can do to reduce the claim rejections?
There are a number of things that you can do, starting with doing regular data reviews and logging the rejections. This way over time you can start seeing the patterns and then address what could be the cause and correct.
If you have an admin person or team, make sure they are trained and get the support that they need to be able to spot error’s on a claim before submission or are able to handle the rejections quickly and efficiently.
Make sure that you understand the coding for your specialty and that you are not only using the correct codes for billing but for diagnosis as well. An incorrect ICD-10 code on a claim can be avoided, if you need to use cause codes with diagnosis codes make sure that you understand when to use them.
