4 Common Reasons for PT Claim Denials (and What to Do About Them)

No one wants to deal with denials, but unfortunately, they happen. In some cases—for some PT practices—they happen a lot. And they can be a major drain on clinic resources and cash flow. The best method for dealing with denials—including medical necessity denials—is to prevent them from happening in the first place. With that in mind, here are four common reasons for PT claim denials—and what you can do to avoid them (or, at the very least, fix them if they’re already occurring):

Claim Denial vs. Rejection

But first, a quick note about the difference between a claim denial and a claim rejection. As WebPT’s Charlotte Bohnett explains in this blog, “rejected claims are returned to the healthcare provider or EDI source without registration in the payer’s claim processing system” and “the healthcare provider then has a certain period of time—defined within the payer’s guidelines—to correct and resubmit the claim.” Denials, on the other hand, “occur after the carrier receives your claims, and they’re typically the result of errors.” In some cases, you may be able to successfully appeal a denial; but in others, you may be left footing the bill for those services, which is just another reason to ensure you’re keeping claims clean.

Now, without further ado, let’s move onto those common denial reasons—and what you can do about them:

1. Billing Errors

According to this APTA resource, the Government Accountability Office found that “billing errors, such as duplicate claims and missing information on the claim—result in more private insurance claim denials than judgments about the appropriateness of services.” In other words, providers aren’t getting paid for the services they’re providing simply because they’re not filing a clean claim (or they’re submitting more than one). In Maryland, for example, the most common denial reason was duplicate claims.

Remedy

Fortunately, these types of errors can be remedied by making some process improvements and implementing a billing software that integrates with your EMR (this minimizes double data entry, which we all know can lead to preventable errors). Chances are good that those practices receiving claim denials due to sending more than one claim for the same patient—and same date of service—are probably relying too heavily on spreadsheets and file folders rather than software that keeps track of these things for them. Looking to really up your clean claim game? Consider outsourcing your billing to the experts. The WebPT RCM team boasts a 98.5% clean claim rate—with an average 8% payment increase per visit—which is pretty darn good. Okay; it’s exceptional.

2. Eligibility Issues

According to the same resource, a significant number of claims are also regularly denied because of eligibility issues—meaning that the beneficiary wasn’t eligible for insurance coverage at the time you provided the services (either because it was before coverage began or after coverage was terminated). While you may be able to win an appeal on a claim that was denied due to an error, it seems a lot less likely that a payer would be willing to pony up any money for a patient who wasn’t even eligible for coverage (unless, of course, that was due to an error on their part). 

Remedy

Luckily, there’s a relatively easy fix to ensure eligibility issues aren’t a source of denials for your practice: verify patient insurance eligibility prior to a patient’s first appointment—and at regular intervals thereafter. That way, you always have confirmation that the patient is in good standing with his or her insurance network—and that your services are covered. In fact, we recommend making it a standard practice to verify that a patient’s insurance information hasn’t changed every time he or she comes in for an appointment (or at the very least every month). Regular verification also enables you to determine if a prior authorization is required by a particular payer. After all, failing to obtain a preauth when one is necessary is another surefire way to earn yourself a denial.

3. Modifier 59 Use

We receive a lot of questions about denials related to modifier 59—and according to this APTA resource, that might be because CMS is now considering it a “potential red flag” worthy of additional claim scrutiny. When CMS first introduced the new X modifiers in 2015—as a means to better understand why a certain service is distinct and separate from another and thus, eligible for unbundling—the agency did not require PTs to use them. But, that appears to be changing. (As a reminder, while many payers also adhere to Medicare’s list of NCCI edit pairs—including which ones are eligible for unbundling in the first place—some do not. So, if you’re ever in doubt about which modifier to use on which codes, contact the payer directly.) 

Remedy

In 2018, CMS issued this detailed article about when and how to use modifier 59 and the X modifiers. In it, the agency explains that “only if no more descriptive modifier is available, and the use of modifier 59 best explains the circumstances, should modifier 59 be used.” In other words, at least for Medicare claims, it may be time to break out those X modifiers—if you haven’t already. When it comes to private payers, it’s best to contact each one individually to confirm modifier preferences. Interestingly enough, earlier this year, CMS granted providers permission to use modifier 59 and the X modifiers on either the column 1 or column 2 code, which should make including these modifiers on claims at least a smidgen easier.

4. Lack of Medical Necessity

Unsurprisingly, there’s little consensus when it comes to how each payer defines medical necessity for its beneficiaries. And as WebPT’s Melissa Hughes explains in this post, there are “42 different major medical insurance companies—and that doesn’t even include Medicare offshoots or supplemental insurances.” So, it’s no wonder that denials for medical necessity are all too common. For the sake of simplicity—and sanity—we’ll use Medicare as an example for this section. For all other payers, it’s best to reach out individually to review your contract or obtain clarification on what constitutes medical necessity. According to Medicare, for a service to be considered medically necessary, it must:

• “Be safe and effective;
• “Have a duration and frequency that are appropriate based on standard practices for the diagnosis or treatment;
• “Meet the medical needs of the patient; and
• “Require a therapist's skill.”

Remedy

According to Hughes, Medicare’s definition affords PTs quite a bit of freedom in deciding “what, exactly, constitutes a safe and effective treatment—or what duration and frequency are ‘appropriate’ for each patient.” However, PTs must document their rationale for deciding which service to provide to each patient—and why they believe the service meets the conditions of a medically necessary service. As Hughes states, “At the end of the day, providers must defend their treatment decisions to CMS by offering proof of medical necessity. And you know what they say: the proof is in the pudding—as long as your pudding is defensible documentation.” (Defensible documentation is a requirement for every other payer as well, so check out this defensible documentation toolkit to learn more.) 

General Advice

A few years ago, billing expert Diane McCutcheon gave a wonderful presentation at Ascend, during which she shared eight top denial errors. Bohnett outlined them in this blog post—along with McCutcheon’s four-pronged strategy for dealing with those denials:

1. “Identify the error code.
2. “Contact the payer to clarify the reason for the denial.
3. “Follow the payer’s instructions for correcting and rebilling the claim.
4. “Make sure you document this conversation—along with any and all interactions you have with the payer.”

Then, if you believe an appeal is in order, file it within seven days of receiving the final decision to ensure you have the best chance for a positive outcome. (The APTA actually offers customizable appeal templates to their members for denials related to change in practice location; use of modifier 59; and medical necessity.) McCutcheon also recommends providers log the error code to identify trends that could point to bigger operational issues. As Bohnett explained in the post, “if a denial is due to lack of coverage or failure to obtain authorization, you know you’ve got a front office issue. If medical necessity isn’t demonstrated or carrier requirements aren’t met, you know it’s an issue with the provider. If the wong codes were billed or there are modifiers missing, you know it’s a billing-related problem.” From there, you can address the root issue and hopefully nip those denials in the bud.

There you have it: four common reasons for PT claim denials (and what to do about them). Have your own strategies to add to these? Share them in the comment section below.