Reduce denials with outsourced Neonatology Billing Services

Denied claims are one of the red flags. These denials have a significant financial impact on neonatology practices. This is mainly because neonatal care is critical, documentation-intensive and often involves prolonged inpatient services. This also creates additional labor costs, delays cash flow, and increases the time spent on appeals.

Furthermore, Neonatal care may involve prolonged hospital stays, daily physician services, changing levels of care, and complex bundling and same-day reporting rules. With so many of these complications, maintaining an efficient reimbursement process becomes challenging.

With the help of outsourced neonatology billing services, providers can not only reduce claim denials but also improve their overall revenue cycle management. However, it is important for every neonatology specialist to understand why their claims are denied. This will give them a better understanding of billing errors that are delaying payment or reducing collectible revenue.

Why Are Neonatology Claims Denied?

A claim may be denied even when the neonatologist provided medically necessary care and submitted the claim within the payer’s filing deadline. This mainly happens when your neonatology claims do not have the correct documented information or accurate coding. The claims might also be denied if prior authorization is missed, which is quite a time-consuming process, along with other issues:

1) Complex neonatal coding:

Neonatology coding is complex because code selection depends on the infant’s condition, age, weight, type of care, and physician documentation. The use of these complex codes is one of the major reasons why most neonatology practices face frequent claim denials.

As a critically ill newborn may simultaneously have prematurity, respiratory distress, infection, feeding problems, anemia, and other conditions. And the coding team must determine which diagnoses can be reported and which are most relevant to the services provided. If diagnoses are missing, incorrectly sequenced, or lack sufficient specificity, the payer may assume that the service is not adequately supported.

There are also cases where diagnosis and service do not match. For example, a claim reports a high-complexity neonatal service, but the submitted diagnoses do not sufficiently reflect the infant’s clinical severity in a proper way. For this reason, the payer may deny the claim based on medical necessity or inadequate clinical support.

Most importantly, neonatal care involves specialized distinctions between routine newborn services, inpatient care, intensive care, and critical care. Selecting the appropriate code requires the billing team to understand the service provided and the corresponding physician documentation. Any coding mismatch can lead to claim denial, downcoding, or reduced reimbursement rates.

2) Incorrect modifiers:

Modifiers are alphanumeric or numeric indicators appended to procedure codes to communicate specific circumstances about a service. They should be reported only when the documentation and payer rules support their use. A modifier should not be used merely to bypass a duplicate or bundling edit. The services must meet the applicable requirements for separate reporting.

It further helps with the specifics of the service billed for the child and determines the appropriate reimbursement. Incorrect or missing modifiers can cause neonatology claims to be denied, bundled, or downcoded. Modifiers may be necessary when multiple services are reported and the circumstances meet applicable coding and payer requirements.

If a billing team applies an incorrect modifier, the payer may identify the combination as inconsistent and deny the service. Denials could also occur when the required modifier is not included in the submitted neonatology claim. Neonatologists may provide multiple billable services during a complex encounter. When supported by coding and payer rules, modifiers can identify services as distinct and separately reportable.

Same-day neonatal services may be subject to CPT, NCCI, global-service, and payer-specific edits. Before appending a modifier, the billing team should determine whether the second service is separately reportable and whether the documentation supports the circumstances communicated by that modifier.

3) Specific documentation requirements:

NICU (Neonatal Intensive Care Unit) care is especially documentation-intensive. This is mainly because newborns may present multiple complex conditions and experience rapid changes in clinical status. A payer may deny a claim when the medical record does not clearly establish why the level or type of care was necessary. For example, a claim for intensive or critical neonatal care may be subject to review when the documentation does not adequately reflect the infant’s clinical condition. The record should clearly support the interventions provided, level of monitoring required, and physician involvement in the patient’s care.

Claims could also be denied if documentation does not support the billed service. The documentation should provide sufficient support for the level of service reported on the claim. If it does not adequately reflect the physician’s evaluation and management, reimbursement may be reduced or denied. Moreover, each of the claim depends on detailed information, be it birth weight, gestational age, clinical condition and even all the relevant complications.

4) Payer-specific requirements:

The same neonatal service may be reimbursed by one payer but denied by another and it is quite a common issue. Be it for the differences in authorization requirements, documentation standards, coding rules or eligibility criteria; all can affect the outcome. This is particularly challenging for neonatology practices because NICU care is complex, expensive and often changes rapidly. Some payers require authorization for NICU admission, prolonged hospitalization, specific services, or certain levels of care.

Let us consider the following example for a better understanding. The neonatologist provides medically necessary intensive care, but the payer requires authorization for ongoing NICU treatment. Although the initial authorization covers the first few days, failure to obtain an extension when the infant remains hospitalized may result in denial of subsequent services.

5) Prior authorization issues:

If you provide a neonatal service without verifying whether that specific treatment is covered by the insurance plan, the claim may be denied by the payer. This is because obtaining approvals from insurers is important to ensure proper reimbursement in newborn care. Payers may still deny claims even when infants require the care clinically. This is because the authorization request was submitted late, or the provider did not know that authorization was required.

NICU hospitalizations can extend for weeks or months. An authorization that initially covers the admission may have an expiration date or a defined number of approved days. There are chances of claims being denied even when authorization was obtained. This happens due to an incorrect authorization number, incorrect date of service, or a mismatch between authorized and billed service.

There is no guarantee that obtaining prior authorization will lead to reimbursement of services. Even if a service has been authorized, the payer may still evaluate whether the submitted claim, documentation, coding, and billed services satisfy its reimbursement requirements.

6) Duplicate claim submission:

In neonatology billing, this can occur more easily because NICU care often involves daily services, multiple providers, repeated procedures, corrected claims, and long hospital stays. A duplicate denial does not necessarily mean the practice submitted the same service twice. Payer systems may flag claims as duplicates when they contain similar information on patients, providers, date-of-service, and procedures. There are many reasons why a claim is resubmitted in neonatology practices.

Duplicate claims may occur because of accidental resubmission, incorrect submission of a corrected claim, repeated NICU services, and payer-processing issues. Suppose a neonatologist submits a claim for an infant’s NICU service on September 10. The practice doesn’t receive a payment response and resubmits the claim on September 20. If the payer has already received the first claim and it is still processing, the second submission may be flagged as duplicate.

7) Coordination-of-benefits issues:

Newborns can have more than one potential source of insurance coverage. The in-house billing team often struggles to determine which insurer is primarily responsible for the claim. For example, a newborn may potentially be covered under both parents’ insurance plans. If the neonatology practice submits the claim to the wrong insurer first, the payer may return a denial indicating that another payer is primary.

At the time of delivery, the newborn may not yet have a separate insurance record or member ID. The practice may need to use available information from the mother’s coverage initially or wait until the newborn is added to the appropriate policy. If the claim is submitted before the payer’s records are updated, it may lead to eligibility denials, coverage-related denials, and member-ID errors.

In case the primary payer has not processed the claim, it may be sent to the newborn’s secondary insurer. The secondary insurer may request for evidence that the primary insurer has already adjudicated the claim. If the secondary claim is submitted without the required primary payer information or explanation of benefits, the secondary payer may deny the claim.

Managing the complexities of neonatology billing is undoubtedly a challenging task for most providers. A single mistake can lead to significant revenue leakage impacting the overall revenue cycle management. When in-house billing teams feel overwhelmed and struggle to submit accurate claims, providers turn to outsourced companies. These professional neonatology billing services are where you have trained staff who ensure that every documentation and coding requirement is met.

How outsourced Neonatology Billing Services reduce claim denials

In-house neonatology billing teams have to deal with complex neonatal coding, time-based rules, global billing issues, and payer-specific rules. The billing staff are not trained or experienced in handling such reimbursement complexities. This often creates multiple billing errors because of which claims are frequently denied by payers. Hiring outsourced neonatology billing services is beneficial to providers because these billing professionals reduce denials in the following ways:

1) Specialized review system:

Outsourced companies often apply specialized coding and claim-review processes as a secondary quality-control measure. Neonatology billing involves unique coding requirements that may be missed by teams handling general medical billing. Before claim submission, a neonatology medical billing company performs claim scrubbing. This involves reviewing codes, documentation, date of services, bundling, and payer policies. Most third-party billing firms have the advantage of employing coders who specialize in particular neonatal services. They assign coders who are familiar with critical care CPT codes, delivery-room attendance, payer-specific policies, and ICD-10-CM diagnosis selection. Some outsourced companies also analyze claims after submission. If the claim is denied, they identify the reason, rectify the claim, and resubmit it for payment.

2) Eligibility and authorization verification:

It is always advisable to verify insurance coverage policies before providing any service. Professional neonatology billing services handle eligibility verification and authorization verification as two distinct but interrelated workflows. The billing company collects necessary information from patients and conducts verification electronically. A patient can have active insurance, but a particular neonatal service may have limitations, network restrictions, or authorization requirements.

The billing team determines whether prior authorization is required, submits the authorization request, and tracks the authorization number. While they track the prior authorization request, the clinic staff and providers can focus on patient care and other tasks.

3) Clean claim submission:

Specialized neonatology billing services use multiple validation layers to ensure claims are accurate before they reach the payer. This proactive approach not only helps identifying errors early but also reduces the risk of downstream denials. If claims are submitted with a smaller number of errors, providers are more likely to get faster reimbursement. The billing companies work on every stage of medical billing that includes documentation, coding, and prior authorization. They also adhere to payer-specific reimbursement policies which reduce the chance of claim denials. Third-party billers use denial trends and clearinghouse rejection data to regularly update their validation and scrubbing methods.

4) Proactive denial management:

This refers to the process of identifying and correcting claims before submission. A professional neonatology billing services treat denial management as a prevention operation. They further maintain payer-specific metrics covering eligibility, prior authorization, timely filing, modifiers, coding requirements, documentation standards, and even NICU level-of-care guidelines. Most billing companies do not always rely on technology to review claims. Claims that trigger certain risks are routed to experienced billers to ensure a better quality of review.

While it is important to note that outsourcing offers several benefits to neonatologists in reducing claim denials, it is equally necessary to choose the right billing company. There are several neonatology billing services to choose from, each with distinct benefits. What matters is the providers’ requirements and the different kinds of issues they face. The appropriate partner should be selected according to the practice’s claim volume, payer mix, denial patterns, technology, reporting needs, and service scope.

How can SunKnowledge be your trusted partner for neonatology billing? 

Managing a NICU is challenging for practitioners due to the reimbursement complexities. SunKnowledge offers multiple benefits that not only reduce claim denials but also improve your overall revenue cycle management. If expenses are a major concern, we have got you covered because our services charges start at just $7 an hour. We also offer a 97% first-pass claim submission rate, 50% shrinkage of AR buckets, and HIPAA-HITECH compliant services. Our CPC-certified coders ensure the accurate application of codes in neonatology billing. Hiring expert neonatology billing services depends on several factors like the company’s tenure in the industry, client references, and quality of service. With over 17 years of experience and excellent client references across the country, SunKnowledge can take your practice to new heights of financial stability and patient care quality. Talk to our experts and get all your billing issues sorted.