Claim Rejections

January 2023

Gone are the days of printing a claim form, sending it by mail, and waiting for a payment or denial. We are now in a world of web portals, clearinghouses, electronic data interchange (EDI), and third-party vendors that facilitate it all. These technological advances can dramatically increase the efficiency of your claim submissions, but beware, they can also increase your claim rejections.

While a claim denial is ‘on file’ but denied for payment, a claim rejection is an electronic claim that is not ‘on file’ with the payer due to errors in the submission that need to be fixed and resubmitted.

There are 3 stages of acceptance/rejection an electronic claim passes through:

1. Software: first, your practice management software is designed to catch basic data entry errors, such as required fields that are blank, before forwarding an electronic claim to the clearinghouse. These errors must be fixed before the claim will leave your software.

2. Clearinghouse: next, your clearinghouse looks for more sophisticated errors, such as invalid or outdated procedure codes (see our December blog on Code Updates), invalid code combinations due to global surgery or bundled services, missing diagnosis, medically unlikely edits (MUE), among others. To help with this, many payer websites provide a “clear claims connection” tool that is designed to mirror how the payer may evaluate procedure code combinations.

3. Payer: finally, the payer you are submitting to can reject for all of the above reasons in addition to patient or policy specific reasons, such as invalid subscriber data or a date of service that falls outside of active policy coverage.

That probably feels like a lot. Don’t panic! Detailed claim rejection information is available through your software and clearinghouse when setup accordingly. These claim rejection reports can then be monitored regularly so rejected claims can be corrected and resubmitted. The biggest takeaway here is that a claim does not meet timely filing requirements until it is accepted by the payer.

Much like everything else, knowing is half the battle.

What’s your claim rejection rate?

Look at your monthly rejections as a percentage of your overall electronic submissions. Dental claim rejections are typically between 5-10% and medical rejections between 10-15%. So, if your combined dental/medical claims rejection rate is 10% or higher, you should be taking a deeper dive into your data to see why.

What are your top 5 claim rejection reasons?

Regularly review your most common reasons for rejections. This will inform areas in your data that need improvement. Perhaps your electronic insurance profiles need to be cleaned up or your front desk staff need training on data entry during registration. Understanding your rejections will help you prevent them.

Once you are aware of your claim rejection rate and your top rejection reasons you can come up with a plan to implement improvements in your data. In fact, claim rejection monitoring can prevent a negative effect on your A/R health and cashflow by allowing you to catch issues before they snowball and impact timely payment. Dental Billing & Consulting Professionals is always here to help, if you’d like to learn more about our report monitoring services please call or text us any time at (860) 435-7344.