Why Was Your PT Claim Denied?
It’s painful extracting payments for physical therapy services—especially when dealing with insurance companies. And if you’ve submitted a claim and it’s denied, resolving the issue likely involves a mess of red tape. Frequently denied claims are one of the biggest issues facing PTs because they slow down the staff and make practice management more challenging.
So, what are the most common reasons PT claims get denied in the first place? And how can PTs mitigate their exposure?
In this article, you’ll learn about the four common reasons denials happen, how to avoid them, and how to quickly fix (or at least understand) the problem.
The Difference Between Denials & Rejections
Rejections are claims submitted without the proper data elements or worse—missing the data altogether. Once a claim is rejected, it’s kicked back to the PT for corrections.
Denials are different than rejections because they undergo a review and are deemed inadequate by the payer. Once a claim is denied, physical therapists have the option to fix the problem or appeal for reconsideration.
1. Data Entry Errors
Without a doubt, issues with data entry are the most significant contributor to claim denials. And it’s no wonder, with visual data checking resulting in 2,958% more errors (not a typo) than double-entry methods.
Physical therapy claims need to be precise; mistyping the provider ID, claim number, name, or address can easily result in claim denial. Practice owners should have strong procedures in place to eliminate mistakes, or better yet, software designed for user-friendly billing.
2. Credentialing issues
If PTs or the practice aren’t recognized by the insurance company and set up within their preferred networks, it can result in claim denials. There are a few scenarios that practice owners should be mindful of to avoid credentialing issues:
New Hire Checks
Whenever a new hire is involved, make sure they’re credentialed with the proper insurance payers. If practice owners are hiring a recent graduate, these checks are made often. However, if you’re hiring someone working under group credentialing at their previous job, these credentials don’t always transfer over.
Typically, the person in charge of credentialing at the employee’s previous work will determine if the employee is still eligible. Or the employee can take a more direct approach—contacting the insurance companies in question.
Name and Address Changes
Another credentialing issue can arise from name and address changes. If a PT changes their name, gets married, or goes through a divorce, they must change their name with each insurance company. Failure to do so will result in claim denials.
3. Eligibility Problems
Patient eligibility is a common reason a claim could be denied. About 49% of U.S. citizens get their insurance through employers. This can cause fluctuations resulting in periods of lapsed coverage, changing insurance, and coverage cancellation. Every practice has a responsibility to verify insurance eligibility, and you’re probably out of luck if the claim is denied (however, you can try to appeal the outcome).
PTs can avoid these hiccups by putting a solid eligibility verification system in place. Even if patients don’t report any changes, it’s imperative to follow up often, if not during every visit.
4. Coding Issues
While this can often be a data entry issue, sometimes the wrong code is used to diagnose a patient. ICD-10 needs to match the service provided, which is why PTs must diagnose based on medical necessity. Medical necessity has a wide range of definitions, depending on who you ask, but it’s commonly understood as a service that’s reasonable and necessary for treatment or diagnosis. And while PTs can justify a range of techniques under this general guidance, the insurance provider—the person footing the bill—wants to dig a little deeper.
Codes must be specific as possible, and if there are unspecific codes submitted with better options available, it could result in claim denials.
Billable codes shouldn’t contain non-billable time (like unskilled prep work or documentation). However, in certain circumstances—like patient education—physical therapists can add time to the appropriate code.
Another common blunder is the improper use of Modifier 59. In its most basic form, Modifier 59 is used to identify a bundle of procedures or services that aren’t commonly reported together but are currently appropriate for treatment. This modifier is used in place of non-descriptive coding on a situational basis. And while that seems easy enough, Modifier 59 is only used when specific time blocks and codes permit. The Medicare Modifier 59 article gives excellent examples to help clarify the appropriate use case.
[BONUS] How to Combat Denials
Unfortunately, it’s not uncommon to receive denials, usually through an explanation of benefits (EOB), electronic remittance advice (ERA), or a mailed letter. It’s imperative to respond quickly and sort out the problem—as this will give you the best chance of getting paid. Identify the error code and reach out to the payer for greater clarification. They’ll be able to provide insight and steps you can take to correct and rebill the claim. The payer will ultimately decide on the validity of the claim. However, if you need to appeal your claim, make sure to formulate a targeted argument, supply any patient paperwork, and bring documentation or proof of interactions you’ve had with the payer.
The Bottom Line
Physical therapists who know the most common reasons for denials tend to mitigate their exposure. If PTs can button up their data entry, credentialing, eligibility screening and coding, they’re likely to submit clean claims consistently. However, what sounds good on paper often takes a backseat to how most PTs learn denials: mistakes. If your practice makes mistakes, it’s ok; promptly follow up with the payer and attempt to resolve the issue.
Busy practice owners can get bogged down by the rejection and denial processes as it takes extra effort to pinpoint and resolve issues. If you’re like most physical therapists, time is too valuable to waste identifying and resolving petty problems. MwTherapy built an all-in-one software solution that eliminates errors, streamlines processes, and, most importantly, gives you the time necessary to take care of patients and run your practice efficiently.
Check out the free demo and move into the future of physical therapy practice management.