As a former emergency department physician from the U.K., this individual was well aware of claim denials and rejections, with payers frequently withholding or reducing payments. However, it was only when his personal insurance company, denied his medical claim for a vitamin D test that he decided to delve deeper into the issue.
He found it challenging to comprehend how Cigna could make such a decision when the physician reviewer had limited knowledge about his medical history. The individual had been experiencing severe pain in his hips and acetabulum, with his physician suspecting a vitamin D deficiency.
Following the payer’s instructions, he appealed the denial, but unfortunately, health insurance upheld its initial decision. It was only after seeking an independent external review that finally reversed the denial. The external reviewer concluded that the test was medically necessary, considering the severity of the bone pain and the risk of bone fracture without vitamin D supplementation.
Working with an investigative reporter, it was discovered that his claim was one of around 60,000 denials made by the same reviewer within two months. Interviews with two former physicians revealed that the company utilized an algorithm to identify discrepancies between diagnoses and tests or procedures, leading to batch denials without a thorough examination of medical records.
The situation deeply troubled the individual, as he emphasized that physicians dedicate themselves to delivering the best possible care to patients, making sound clinical decisions, only to face disheartening denials.
Outsmarting Payer Algorithms
While report from an Non-profit organization highlights denials, the issue of massive volumes of denials is not limited to a single payer, as stated by, CEO of Medical coding institute. They points out that all payers have experienced an increase in denials over time, primarily due to the growing reliance on algorithms and artificial intelligence in claims processing.
Coding academy advises medical providers to inundate payers with peer-reviewed literature supporting the medical necessity of their services when appealing denials. It is essential for the appeal letter to articulate the reasons for challenging the denial and offer strong support for the position. Providers often find that payers are mistaken in their decisions.
Interestingly, medical practices might not even be aware that a claim has been denied unless they actively check the claim status through the payer portal. According to practice management consultant, payers rely on this lack of vigilance and hope providers won’t stay on top of their accounts receivable. This could leave medical practices vulnerable to being taken advantage of.
To counteract algorithms used by payers, a strategic approach is to ensure that each test or procedure is properly linked to the diagnosis that most accurately justifies the need for it. Many payer algorithms lack sophistication and may only consider the first-listed diagnosis code. By taking the extra step to link the codes appropriately, providers can reduce the risk of denials, even though it may not guarantee prevention in every case.
Defeating Denials Linked to Modifier 25
Following the report, an insurance company recently announced its plan to prescreen claims using Current Procedural Terminology code modifier 25 before making payments, starting May 25, 2023. This decision has raised concerns, particularly among small, independent practices, according to, CEO of an Medical coding institute. She believes that physicians will face delayed payments until they go the extra mile to submit thorough documentation.
Coding academy worries that what might start as a three-week turnaround time for payment could easily extend to three months or longer, especially during vaccine season when physicians bill flu shots with annual wellness visits or chronic care management. She also fears that other payers may adopt a similar policy, citing United Healthcare (UHC) and Anthem’s initial attempts at implementing such a policy, which were later withdrawn due to industry pushback. For payers, this policy presents an opportunity for significant cost savings.
•To navigate the insurance policy effectively, Coding academy offers three tips for physicians:
•Hire an external auditor to validate data and ensure compliance.
•Provide education to physicians and staff based on the audit results.
Establish a dedicated workflow for claims with modifier 25, assigning a staff member to submit necessary documentation.
Medical Coding and Reimbursement Experts, points out that applying modifier 25 correctly has always been a challenge across all payers. The process became even more complicated with the introduction of new evaluation and management (E/M) guidelines on Jan 1, 2021, where codes are now solely based on medical decision-making, requiring physicians to separately account for procedures and services.
Healthcare organization notes that denials commonly occur when physicians bill a Medicare annual wellness visit and E/M code alongside a chronic condition diagnosis code. Since the wellness exam already includes a review of current medications, billing higher-level codes is often unsupported by documentation unless there is a new problem or significant health change.
Enhancing Diagnosis Code Specificity
Payer scrutiny of diagnosis codes is a significant concern for small, independent practices, as highlighted owner of Healthcare Organization. Some payer edits align the diagnosis code with the level of service billed, leading to potential down coding by a whole level if an unspecified code is used. This issue arises when physicians use unspecified diagnosis codes as the first-listed code. Similarly, it occurs with unspecified hierarchical condition category (HCC) codes submitted to Medicare Advantage and commercial plans.
For instance, if a patient presents with hypertension and chronic kidney disease (CKD), the correct approach is to report a combination code along with an additional code specifying the stage of CKD, as per International Classification of Diseases, 10th Revision, Clinical Modification (ICD-10-CM) guidelines. Neglecting to capture these codes accurately could result in potential failures in risk adjustment audits, as these codes impact risk adjustment.
Healthcare organizatoin offers practical advice to address this concern:
•Run a report of the practice’s top 20 diagnosis codes and assess the specificity of those codes. Identify how frequently unspecified codes appear for particular diagnoses.
•Update the electronic health record (EHR) drop-down menus to include more specific codes, if necessary, to improve accuracy in reporting.
•Use “other specified” codes when appropriate to enhance specificity in coding.
•Regularly review ICD-10-CM coding guidelines to ensure compliance and prevent overlooking combination codes and specific coding rules.
•Request feedback from payers on HCCs, especially for Medicare Advantage plans, as they can provide valuable information since they undergo federal risk adjustment audits.
Mastering Insurance Eligibility Verification
Frequent claim rejections often occur due to providers’ failure to verify the patient’s insurance coverage, as explained by founder and president of Manage My Practice. The process of identifying the patient’s insurance plan can be challenging, with patients themselves often confused about their coverage.
Experts recommend three critical strategies to address this issue:
•Strengthen eligibility efforts at the beginning of the year, as that is when insurance plans typically change. Utilize real-time eligibility checks and provide staff education on efficient verification procedures. Additionally, leverage patient portals and check-in kiosks to encourage a more streamlined process, relying on patients’ self-reported information, according practice management consultant.
•Always verify the patient’s insurance plan by checking their insurance card. Patients may not always know if they have a Medicare Advantage plan or a supplement plan to Original Medicare. Some commercial plans offer both options, which can lead to confusion. Whaley highlights that while most practices are enrolled with Medicare, they may not accept Advantage plans, resulting in potential denials.
•Be mindful of the Medicaid redetermination process. Some patients who previously qualified for Medicaid during the COVID-19 public health emergency may no longer meet the criteria and may have switched plans, leading to coverage issues.
By implementing these strategies, medical practices can improve their eligibility verification processes and reduce claim rejections caused by insurance coverage uncertainties.