How to Identify Underpaid DME Claims for DME Billing Companies

In the healthcare industry, medical billing serves as a cornerstone in healthcare practice management & administration and sometimes poses particular difficulties for smaller medical entities like independent labs, practices and many other kinds of providers too. As a result, timely and precise billing stands out in importance when it comes to ensuring a secure billing operation, with faster payment for rendered services and equipment sold, ensuring seamless office operations while upholding top-notch patient care standards.

This article will focus on claim denials in DME billing, a major issue for many DME billing companies. In the coming sections, we will look at different kinds of reasons why claims get denied or underpaid, and how to correct such faults.

Understanding Denials in DME Billing Operation

More often than not, insurance providers and governmental payers turn down or reject claims, leaving practitioners questioning the fairness of their compensation. Underpayment emerges as a prevalent issue within medical billing, exerting a significant impact on the financial stability of medical enterprises. Understandably, navigating denial management within healthcare remains an inevitable aspect of the billing journey.

Differences between DME Claim Denials and DME Underpayments: Distinguishing between claim denials and claim underpayments can be quite confusing for many. However, it is crucial to understanding the billing process, especially if a DME billing company is looking to improve its ROI. Claim denials occur when an insurer or payer declines payment for a provided service or treatment. Such denials frequently stem from billing inaccuracies, absent documentation, or services falling outside the coverage scope of the insurance policy.

On the other hand, underpayment transpires when the payer reimburses the practitioner for an amount lower than the billed sum for a given service or treatment. Various factors can contribute to underpayments. Let us take a closer look.

Factors Contributing to Underpaid DME Insurance Claims

  • Coding errors – Inaccurate coding often leads to reduced reimbursement rates. Staying updated with evolving codes and requirements demands specialized expertise. Even minor errors, like omitting a required modifier, can result in significant discrepancies or complete claim rejections.
  • Unbundling process – Some procedures are bundled under one code, encompassing all its components. Unbundling occurs when practitioners bill each step separately, potentially leading to higher reimbursement rates on paper but underpayment if insurers deny these claims.
  • Fee Schedules – Insurance companies operate on distinct fee schedules dictating reimbursement amounts. Billing according to the wrong schedule or reduced rates set by insurers can result in practitioners receiving less than what was billed.
  • Policy Changes – Updates in policies and reimbursement rates by insurers may lead to lower compensation for practitioners, impacting reimbursement amounts.

Essential Steps for Effective Claim Denial Management

To mitigate denied claims and ensure a smooth billing process, several crucial steps can be implemented:

  1. Conducting regular reviews: Stay informed about fee schedule variations among insurers and bill accordingly to minimize discrepancies.
  2. Monitoring coding accuracy: Employ experienced medical coders abreast of the latest guidelines to promptly detect and rectify any coding errors, averting future underpayment scenarios.
  3. Verification of DME insurance coverage plan: Prior to administering services or DME items like walkers, crutches, CPAP etc., verify the patients’ insurance coverage, particularly for payers mandating pre-authorization to prevent refusals of payment for uncovered services.
  4. Implementation of a claims tracking system: Utilize a robust claims tracking system enabling practitioners to monitor claim status, detect underpaid claims, and facilitate efficient follow-ups on appeals.
  5. Staying updated on insurance policies and other new billing mandates: Regularly review insurers’ policies to stay informed about changes in reimbursement rates, coverage, and coding requirements unique to each insurer.
  6. Utilization of automated solutions for DME billing companies: Leverage automated solutions like billing software and electronic health records (EHRs) to streamline billing processes, minimizing the risk of coding errors. Automation facilitates adherence to correct fee schedules and submission protocols.
  7. Continual staff training: Provide ongoing training to ensure staff, including certified billers, remains updated on insurance coverage and billing practices. Keeping them abreast of the latest codes, guidelines, and policy changes mitigates the risk of underpaid claims.

Ways to Track Your DME Claims and Improve the ROI of Your DME Billing Company

Vigilant monitoring and tracking of claims play a pivotal role in detecting underpaid claims and initiating corrective measures. Here are some proven actions for efficient monitoring:

  1. Utilize a claims tracking system – Employing a dedicated claims tracking system enables practitioners to oversee claim statuses and spot any irregularities. These systems promptly alert practitioners to rejected or underpaid claims, facilitating swift action.
  2. Review all your DME billing reports – Regularly examining billing reports provides practitioners with valuable insights into underpaid claims. These reports offer detailed information on reimbursement rates, coding accuracy, and insurance coverage, aiding in the identification of discrepancies.
  3. Follow up on claims constantly – Actively following up on unpaid or underpaid claims helps practitioners uncover any billing process issues or discrepancies in insurer policies. Contacting insurers allows practitioners to clarify discrepancies and negotiate for equitable reimbursement rates.
  4. Appealing underpaid claims is a routine aspect of healthcare reimbursement. Providers must pursue appeals to ensure fair compensation for their services. Resolving the underlying issue is essential, though it can be time-intensive, leading to abandonment of many claims following denials.

Proactive appeal of underpayments is crucial. While services not covered will not be reimbursed, common scenarios warranting appeal include

  • Underpayment due to coding or fee schedule errors
  • Coverage denial stemming from incomplete or any inaccurate information, be it missing patient information like medical history, address, diagnosis data etc.
  • Accidental down-coding of eligible and medically necessary DME equipment
  • Failure to reimburse for services or the equipment covered by the policy

As you know negotiating with payers for equitable reimbursement rates is a skill-intensive aspect of medical billing. Here are a few strategies to enhance your negotiation prowess

  1. Understand Your Value: Comprehend the value of your services and associated costs. A clear grasp of expenses aids in negotiating favorable rates, especially for complex procedures.
  2. Research Reimbursement Rates: Investigate reimbursement rates within your specialty and locale to ensure fairness in compensation.
  3. Come Prepared: Equip yourself with documentation supporting your position, including data on costs and expenses. This preparation strengthens your case for fair reimbursement.
  4. Consider Outsourcing: Outsourcing medical billing grants access to seasoned billing professionals adept at negotiating with payers. Their expertise can bolster your negotiating efforts.

The Advantages of Outsourcing Claims Denial Management

Addressing denied claims effectively demands significant time and specialized skills. Outsourcing denial management within your medical billing process offers numerous benefits, including:

  1. Streamlined administrative operation – Entrusting medical billing to external experts alleviates the administrative burden on healthcare providers, enabling them to devote more attention to delivering exceptional patient care.
  2. Enhanced overall cash flow – Leveraging the expertise of dedicated billing professionals accelerates revenue cycles by expediting claim submissions and resolving rejections and denials promptly, thereby bolstering cash flow.
  3. Heightened operational efficiency in no time – Medical billing firms possess proficiency in coding accuracy, navigating insurance policies, and optimizing reimbursement rates. Outsourcing fosters operational efficiency, minimizing underpaid claims and maximizing revenue.
  4. Access to billing proficiency and lesser error rate – With a team of billing specialists skilled in negotiating with payers and securing equitable reimbursement rates, medical billing companies offer access to invaluable expertise. Outsourcing facilitates access to this proficiency, ensuring fair compensation for medical businesses.

Adopting best practices like regular fee schedule reviews, coding accuracy monitoring, and proactive appeal processes can mitigate revenue loss. Outsourcing your DME billing services to a DME billing solution like Sunknowledge offers a plethora of advantages, including heightened efficiency, cash flow optimization, and access to seasoned billing professionals. At Sunknowledge, our tailored claims tracking

and management system not only ensure proficient billing operation and a team that diligently pursues all unpaid and underpaid claims, but further help clients by alleviating them from the burden of deciphering denial codes and negotiating with payers. To discover how much we can augment your revenue, contact us today.