Where Did My Money Go?
Michael J. Breus, PhD, DABSM
We all struggle with denial of claims on a daily basis. I encourage everyone to learn how to read your explanation of benefits (EOB) forms, also called explanation of medical benefits (EOMB) forms. You can learn from them if your practice is doing the following: has a delay in submitting charges; sets their fees too high or too low; has inappropriate policies and procedures; may be writing off collectable claims; and may be coding improperly. First, collect the EOBs from your top 10 payors.
Step 1. Look at the date of the EOB and then the dates of service (DOS) for the claims. If the difference is more than 30 days, then you are likely either rebilling previously unpaid claims or not billing in a timely manner. Rebilling often shows filing errors and can be fixed by retraining the staff. Nontimely billing may mean an overworked staff and the need for someone to help out.
Step 2. Look at the amount charged vs the amount allowed. If they are equal, your fees are too low; it is that simple. If any payor actually pays you correctly, they likely would have paid you more and there is room for negotiation. If your fees are more than 40% higher, then you are likely charging too much.
Step 3. Look at the frequency and amounts listed as co-payments and deductibles for the paid claims. Is your practice collecting these amounts prior to the services being performed? If not, are they billing the patient or just writing this money off? Billing can be expensive, and if they are writing it off, they are giving away your services. Remember that you cannot write off Medicare and Medicaid as this is considered illegal.
Step 4. Look at the reasons for a denial. Each denial has a code attached to it explaining the reason for the denial. There are many common reasons for denied sleep claims including no referral or preauthorization, patients may not have coverage for sleep services, group or provider numbers are not correct, or place of service code is incorrect. Many of these types of problems are either an office problem or a payor problem. The best way to tell is to compare the submitted claim to the denial. If there are differences (the denial is incorrect), resubmit the claim. If this happens more times than not, it may be time to get more aggressive with the payor as they are simply stalling payment. In some cases, you may need to contact the insurance commissioner of your state. But keep in mind that if a plan is self-insured, the commissioners office does not have jurisdiction. You would have to contact the corporations executive level of insurance plan implementers. If the denial is correct, you need to retrain staff on their mistakes and resubmit the corrected claim. These four simple steps can save a large percentage of your profit margin. Try them and let us know what happens. Due to the large number of questions we get at www.sleepcmi.com on these very issues, we have produced a new manual entitled Coding, Billing, Claim Submission, and Denials for Sleep Centers/Labs, Answers to Frequently Asked Questions.