Claim Denials, Procedure Notes, And Federal ERISA Law: What They Have In Common

Claim denials are one of the most common issues in healthcare. These claim denials can cost hospitals, outpatient surgery centers, and even physician’s offices quite a bit of money every year, especially when you consider the cost of trying to collect on them. According to some experts, most of the costs recouped from those denials are just enough to pay for the billing employees and all of the steps that they must take as they send the claims through the appeals process. This is, as you can imagine, unacceptable.

Notes Are Essential For the Billing Department

Although claim denials occur for many reasons, billing errors are the most common. This happens quite a bit in the surgical field because the surgeons – who are great at their jobs – aren’t so good at keeping accurate notes on the procedures. Those notes are crucial because the billing employees need to know exactly what transpired in order to send the claim out to the commercial health insurance company. They don’t have the time, nor do the surgeons, to ask any questions about the procedure in order to clarify everything.

According to an article in Becker’s ASC Review, ”In today’s healthcare environment, ensuring accurate documentation is further complicated by rapidly changing guidelines and a shift from fee-for-service reimbursement models to pay for performance programs. More than ever, value-based care requires surgeons to capture patient acuity and comorbidities accurately.”

The article goes into detail on how proper paperwork can help both the patient, the provider, and the billing team, “Interfaced with EHRs; the solution saves physicians time by eliminating the need to validate notes with appropriate codes. It can be used across any specialty, and surgeons have the option to dictate notes. While documenting, surgeons receive automatic prompts when they may be missing clarifications to satisfy regulatory requirements, which can help minimize claim denials and delays. Quick access to daily surgery schedules and patient lists are also available on surgeons’ mobile devices, a HIPAA-compliant feature which adds efficiency to a surgical team.”

It all comes down to filling out everything accurately and asking the right kinds of questions. However, even in an absolutely perfect setting, claim denials still occur.

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Avoiding Claim Denials Isn’t Easy

The best thing to do is to avoid these claim denials. Many are sent back by the commercial health insurance company because the amounts are wrong, they are miscoded, or proper approvals weren’t requested and received. When the health insurance company sends back an unpaid claim, they’ll explain why. Your billing employees will need to check on this reason and find a way to correct it before resubmitting the claim.

At this point, the clinic has their billing employees send in an appeal to the health insurance company. According to current laws, there are three of these appeals available at the state level.  The insurance company then goes over the newly appealed claim denials and comes up with a new judgment. In some cases, the claim is paid. This makes everyone involved happy. The hospital no longer has to worry about that unpaid claim and they under with more money in their bank account.  In other cases, the insurance company might just pay a portion of the claim. This is called an underpaid claim. The reasons for these depend on the allowed amounts and any preapprovals – basically the same as the ones from the first round of claim denials.

On top of this, the insurance company could also keep refusing the claim outright. As we already stated, the hospital or clinic can go through three rounds of these appeals, even if the claim is underpaid. The collections process allows for this. Every time that the claim is sent back for an appeal, the odds that it will get paid go down. In some cases, the claim is partially paid and then partially paid again, leaving a balance by the end of the appeals process. Each time this happens, it costs the hospital more money and creates additional work for the billing employees.

Where Uncollected Claim Denials End Up

After the three state-level appeals process is completed and the claim denials are still in place, your hospital or clinic has a choice. That money usually ends up going uncollected. It goes to your accountant’s office  where it ends up in what we call a “debt bucket.” This is a list of permanent debts on a balance sheet. The medical facility needs to make even more money to make up for this growing list of debts. Since hospitals and clinics have bills to pay so that they can stay open, this list of debts can be extremely problematic. The reason why most hospitals go bankrupt and close their doors is due to them.

Thankfully, there is a solution to getting those claim denials paid. This involves the Federal ERISA process. While many hospital administrators have heard of it, they aren’t sure about how to even begin using it.

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What The Federal ERISA Appeals Process Does

A Federal ERISA appeal can be filed on all of those unpaid or underpaid claim denials. The problem with this is that many of these hospital administrators aren’t sure of the process. As you can imagine, this federal process is quite complex, meaning that many billing departments don’t know how to work through it. They aren’t taught this in schools. Plus, many of the employees in those billing departments are busy either with sending out current bills or wading through state-level appeals. They just don’t have to time to figure out Federal ERISA appeals. This means that in most cases, those claim denials are written off and add to an already growing pile of debt.

What is ERISA? It stands for Employee Retirement Income Security Act. It was enacted back in the 1970s and was initially designed to protect employee retirement plans. Over time, it’s become a federal law that protects self-funded healthcare plans as well.

Essentially, the Federal ERISA appeals process is designed to get your hospital the money that it’s owed by those commercial insurance companies. Using it requires the use of a specialized billing process. It all starts with your accounting personnel. Rather than having them place your money in a debt bucket, call in a specialist. Take those claims and place them in a file.  Then call in an expert, such as ERISA Recovery. We’ll need a few things from you, including that list of claim denials and some other information. We can take it from there and will file those Federal ERISA claims for you. On top of this, we have a guarantee in place stating that we’ll recover at least one million dollars in denied claims for you within 12 months. We also don’t charge anything up front.

Contact Us Today

Is your hospital or clinic burdened with commercial health insurance claim denials? You don’t want your hospital to end up going bankrupt or shutting down – not when there’s money out there that you can still collect. This is why you need to contact ERISA Recovery today. You can reach us at (972) 331-4140 or by filling out the contact form on our website. It’s time for you to move forward and take control of your hospital’s financial future!