Denial Management FAQ

Introduction

During our denial management webinar, we discussed the difference between rejections and denials, explained how to handle both, and provided a five-step plan for stopping them in their tracks. The webinar concluded with an exhaustive Q&A, and we’ve amassed the most common questions here.

Insurance Issues

We’ve had issues with auto insurances denying 97112 (neuromuscular re-education) for non-neuro diagnoses, even in cases when the patient’s medical record justifies the provision of this modality. What should I do?

If your documentation clearly supports the medical necessity of the service—and 97112 is the most appropriate code to describe the service provided—then you should appeal the denial. Keep in mind that payment for any service code depends on more than just the diagnosis itself; it’s more about proving that the service is medically necessary.

What do I do when there is a denial from the primary insurance but there is a secondary insurance?

When a patient has a secondary insurance, you’ll simply bill the secondary in the same way you billed the primary. As explained in this article, “For the secondary, create a new billing with the secondary insurance information and attach a copy of the explanation of benefits (EOB) from the primary carrier. The secondary will then process the claim based on the balances owed by the patient…”

How do I document conversations with insurance companies within WebPT?

You can include any relevant notes—including those from conversations with insurance reps—within the Patient Notes section of WebPT, which you’ll find on the left side of the patient chart. That way, the history of conversations you’ve had with the patient’s insurance company will be saved in that patient’s chart forever.

Does insurance pay for re-evaluations?

Medicare and most commercial payers will pay for a re-evaluation, but it is not appropriate to bill for a re-eval when you complete a routine progress note. In fact, therapists should only bill for re-evaluations under a very select set of circumstances. According to WebPT President and Co-Founder Heidi Jannenga, re-evaluations are only appropriate if the patient presents with a new diagnosis or at least one of the following situations applies:

• “Through your own clinical assessment, you note a significant improvement, decline, or change in the patient’s condition or functional status that was not anticipated in the POC for that interval.
• “You uncover new clinical findings during the course of treatment that are somewhat related to the original treating condition.
• “The patient fails to respond to the treatment outlined in the current POC, and you determine that a change to the POC is necessary.
• “You treat a patient with a chronic condition and you don’t see him or her for treatment very often.
• “Your state practice act requires re-evaluations at specific time intervals.”

How do I get Medicare to pay for services above the therapy cap?

That depends on which cap you’re referring to. Medicare will usually pay for medically necessary services above the initial cap as long you affix the KX and GP modifiers. If you would like to provide medically necessary services to a Medicare beneficiary beyond the manual medical review threshold, then you may continue to do so. However, you may be subject to a targeted review process in which review contractors will select claims for audit based on a set of criteria that may indicate red flags (for example, they may target providers with a high percentage of patients who have received therapy beyond the therapy cap thresholds as compared to other industry professionals). If a review contractor decides that your documentation doesn’t support the medical necessity of your services, then Medicare may revoke payment (although you can appeal their decision). To learn more about navigating the cap, check out this guide. It’s also important to note, that you should not be issuing blanket ABNs for patients who require medically necessary services above the cap. To learn more about proper ABN use, here's a helpful blog post.

Last year, the PT-PAC was two votes away from ending the therapy cap once and for all with the Medicare Access to Rehabilitation Services Act (H.R. 807/S. 253), which is why they believe that they can push it through this year—with your help. To do your part, call and send letters to your local legislators to tell them how much the therapy cap is hurting our industry and our patients. For more information on how to take action on this important issue, check out this APTA advocacy page.

Medicare has been denying PT evaluations with treatment on the same day. What am I doing wrong?

Medicare usually allows for PT evaluations and treatment on the same day. Be sure you’re not only applying Modifier 59—to indicate the services were performed separately and distinctly from one another—but also affixing a GP modifier. All CPT codes for physical therapy services must include a GP modifier, which indicates the services were provided under a physical therapy plan of care.

If I miss an insurer’s timely filing deadline, do I have any recourse?

Typically, no. If you haven’t adhered to the insurer’s filing requirements—including when to submit a claim or appeal a denial—you’re most likely out of luck. That’s why it’s so important to know the timely filing requirements for each and every one of your payers—and they can vary widely. Now, if you receive a denial for failing to meet the timely filing deadline—but you have proof that you did—then you can use that proof to support an appeal.

I received a claim denial for a missing authorization when I did, in fact, obtain prior auth. What do I do?

This is the perfect opportunity to appeal—with your eligibility verification reference number, authorization number, and all of your supporting documentation, that is. If the insurance company still won’t reverse its decision, then you can ask the patient’s permission to submit his or her information to your insurance commissioner for help receiving payment. If your patient agrees, then let the insurance company know that if it doesn’t turn the claim around based on the clear documentation you have provided, you will be going to the insurance commissioner. Then, follow through.

How should we handle situations in which an insurance company takes a long time to pay a claim and our patients become frustrated when we bill them for the remaining balance months after the date of service?

This is another reason why estimating the cost of the services you’re providing—and collecting the patient’s portion at the time of service—is a good idea. Just make sure to clearly communicate to the patient that when the insurance company pays the claim (whether that be tomorrow or in two months), you may need to bill the patient for the remainder or issue a refund check if you collected too much.

What should I do if an insurance company continues to process claims incorrectly for every patient we see?

If you’ve made every effort to work with an insurance company to ensure that your claims are being processed correctly, and you’re not making any headway, then it may be time to consider moving out-of-network for this particular insurance company. While that’s not an easy decision to make—and certainly not one you should act on without some serious consideration and a solid plan—doing so would enable you to work with your patients directly to receive payment for your services. To learn more about moving out-of-network, check out this FAQ.

What are the top eight denial errors?

1. Data-entry mistakes, like a wrong claim number, wrong provider ID number, or incorrect name or address (data entry errors account for more than 90% of denials)
2. Invalid insurance information
3. Missing claim information (for example, ICD-10 codes, G-codes, and modifiers)
4. Missing or invalid referral/authorization
5. Credentialing or other provider issues
6. Submission outside of the timely filing window
7. Wrong subscriber—or policyholder—information
8. Failure to submit requested information

I have gotten different reimbursement amounts when billing the same codes for two different patients with the same insurance plan. Why is that?

This may have to do with the other codes on the claim and the order in which those codes were submitted, as some payers reduce reimbursement rates when multiple service codes are billed for a single date of service. To learn more about how code order may affect reimbursements, check out this resource.

What is the maximum number of units I can bill Medicare for a single date of service?

That depends on the services you are billing for. While Medicare has established Medically Unlikely Edits (MUEs) indicating “the maximum units of service that a provider would report under most circumstances for a single beneficiary on a single date of service,” there is not an MUE value for every single CPT code. For more information on MUEs, refer to this resource.

Some of our insurances take longer than the specified time (usually 30-45 days) to process a claim. Is this legal?

In most cases, no. We recommend researching your state’s prompt claim payment laws and bringing those rules up during your conversations with insurance reps. If the insurance company still fails to process claims within the mandated time frame, you may need to take legal action or submit a complaint to your state’s department of insurance or insurance commissioner.

Where can I find the fee schedules for Medicaid and workers’ compensation?

These fee schedules vary by state, so we would recommend searching for the ones applicable to your location using the search terms “Medicaid fee schedule [your state]” and “workers’ compensation fee schedule [your state].” This US Department of Labor resource may also be helpful.

Claim Quandaries

Does the order CPT codes appear on a claim form affect the amount of reimbursement? How so?

According to this resource, “Assigning these services in the proper sequence based on a highest to lowest RVUs can ensure proper payment. When submitting the claims, listing the codes in the wrong order may lower your reimbursements.” The article also provides a few case examples demonstrating how code order may affect payment. Commenters in this AAPC coding forum also suggest ordering codes in order of value—especially when billing Medicare: “Medicare tends to pay (after primary procedures) about 50% for next highest CPTs, then 25% as they are listed,” one discussion participant advised.

How should I bill for a patient who receives treatment for multiple body parts on the same day?

If you are billing for two services that normally would be considered “bundled”—in other words, they form an edit pair—then you may need to use modifier 59 in order to receive payment for both services when they were, in fact, provided separately and independently of one another (because they involved two different body parts, for example). To learn more about edit pairs and modifier 59, check out this blog post. Alternatively, some insurances are now accepting the new X modifiers in lieu of modifier 59. To learn more about these modifiers, read this article.

What are the therapy modifiers, and when should I use them?

GP, GO, and GN are therapy modifiers that designate the type of therapy being provided (PT, OT, or SLP, respectively). When completing functional limitation reporting (FLR), therapists must report G-codes, severity modifiers, and therapy modifiers. Additionally, many payers require use of a therapy modifier when billing a designated therapy code.

Can you provide some advice about selecting—and working with—a third-party biller?

Many providers worry that because they’re outsourcing their billing, they are no longer in control. But, that’s far from the case. As the practice owner, you’re the one paying for the billing company, which means you’re always in control. With that in mind, don’t ever be afraid to call a meeting with your billing company to discuss your A/R—or anything else, for that matter. Your A/R should be decreasing, and if it’s not, then that’s cause for concern. The billing company should be doing everything in its power to identify the issue—whether it be on the part of the provider or the biller—and the company should always be able to identify the reason for any underpaid accounts.

If you’re in the process of selecting a new third-party biller, be sure to get at least three references from other providers in your specialty who have used that company. Then, when you speak with someone from the company directly, listen closely to what it is they’re offering you—how frequently they’ll get your claims out the door; how quickly they’ll respond to denials or rejections; and when they’ll download and post payments. (Hint: these things should be immediate; the last thing you want is for your claims to sit in a pile to be dealt with at the end of the week.) You should also receive everything electronically within 10–30 days. Also, be sure the pricing structure for your third-party biller incentivizes their collection efforts (i.e., you pay them a percentage of the money they collect). That way, you can be sure that they’re motivated to collect—and follow through on—every single one of your claims (even the challenging ones).

Which billing software and services do you recommend?

We strongly recommend the WebPT billing service and software—both of which integrate with WebPT, eliminating double data entry and ensuring maximum reimbursements. To learn which solution is right for your practice, check out this post.

Why is it so important to prevent claim denials?

A few years ago, MGMA found that the average cost of reworking a denied or rejected claim is about $25. So, if you receive 100 denials in a month, you’re spending an extra $2,500 just to collect the money you’ve already earned.

Who owns what when it comes to billing—and mitigating claim denials?

To give you an idea of who owns what—and how it all impacts the billing cycle—let’s take a look at each role’s responsibilities:

The front-office staff interact with the patient first, so they set the expectations regarding patient payment. They also:

• collect demographic and insurance information;
• verify insurance eligibility;
• perform accurate data entry;
• manage the authorization/referral process;
• estimate patient financial responsibility;
• schedule appointments;
• check the patient in and out; and
• collect patient payments at time of service.

Therapists provide appropriate clinical intervention based on the plan of care—and handle the referral/authorization requirements, if applicable. They also complete defensible documentation and determine charges for services.

The biller:

• processes the claims daily based on the therapist’s notes and charges;
• applies insurance and patient payments; and
• manages denials, which we’ll cover more in depth in a bit. 

The collector handles the accounts receivable to ensure claim follow-up and consistent cash flow.  

And finally, the owner/director/administrator should create a culture that supports accountability and accurate billing and collections. He or she must instill trust, encourage effective communication, and resolve conflicts. This leader must set standards and goals—and most importantly, recognize successes.

How do we know if our billing company is holding its own? What do we do if it’s not?

Billing software—especially the kind that integrates with your electronic medical record—can eliminate many common claim denial errors through built-in checks and alerts. Furthermore, in addition to eliminating the need for double data-entry, such systems make the process of generating and submitting claims—as well as managing their acceptance and reimbursement—much faster. And if denials do happen, it’s easier to track and resolve the issue within a software than it is by hand—but only if you have the right software. With that in mind, any solution you implement should enable you to maximize the following:

1. Communication: A system that integrates with your EMR ensures a seamless flow of patient data and real-time access to patient records and billing information.
2. Productivity and efficiency: Super-simple, user-friendly billing interfaces; detailed activity logs; and one invoice from one company all help you submit cleaner claims in less time.
3. Claims management: Real-time analytics; patient invoicing and billing; and secure patient portals ensure that you won’t have to chase down missing patient data, claim statuses, or payments.
4. Information security: You should be able to securely enter and save patient data anytime, anywhere, from any web-enabled device—and be able to do it confidently with a system that features bank-level encryption, automatic backups, and fully HIPAA-compliant infrastructure.
5. Compliance: Built-in alerts and checks and balances ensure you know when you need to affix a missing modifier—or adjust your billing to account for Medicare’s 8-minute rule—thereby increasing your first-pass claim acceptance rate.

If your current billing solution can’t do all this, then it’s time to make the switch to one that will. For more information about WebPT’s billing software, Therabill, check out our product page.

What is a Medically Unlikely Edit—and how can I address the error?

According to this CMS FAQ doc, a Medically Unlikely Edit (MEU) “is a unit of service (UOS) edit for a Healthcare Common Procedure Coding System (HCPCS)/Current Procedural Terminology (CPT) code for services rendered by a single provider/supplier to a single beneficiary on the same date of service.” According to this resource, if you receive this message on a claim, then Medicare believes that “the number of days or units you’ve billed exceeds CMS’s acceptable Medically Unlikely Edit maximum.” You can read more about MEUs in this article.

Where can I go for a list of all error codes?

For a list of all error codes, go to this page.

What’s a good ballpark goal for my practice’s A/R?

As a clinic, your goal should be to have 90% of your money under 90 days—and most of your accounts should be current and under 60 days. Now, a lot of times, workers’ compensation claims take longer than other claims—and patient payments take the longest (often more than 120 days). That’s one more reason why you should up your efforts to collect patient payments at the time of service. According to McCutcheon, every time her company has to submit a statement to a patient, it reduces the company’s ability to collect by at least 50%. That’s a lot of money left on the table.

How do I contact my insurance commissioner?

The National Association of Insurance Commissioners maintains a database of all insurance commissioners by state. To locate yours, click your state on this map.

We are an independent PT clinic. Should we use place of service code 11 (office) or 49 (independent clinic)?

According to this APTA FAQ, POS code 11 is appropriate for all PT services rendered in an office.

Compliance Qualms

Do I have to bill for every service provided—even the low-paying ones or the ones I know will be denied?

We always recommend making your claims as accurate as possible. If you were ever audited, and your documentation did not match up with the codes included on your billed claims, it could be a major red flag. So, include all of the codes that most accurately represent the services provided.

If a patient receives treatment from a PT and an OT during the same visit, can we bill for both types of therapy?

Yes—in some cases. “Although a PT and OT can both provide services to one patient simultaneously, only one therapist can call dibs and bill for the entire service. Alternatively, they can go halfsies and divide the service units accordingly,” this blog post explains (read the full post for more tips on billing in team therapy scenarios).

What’s the 8-Minute Rule?

The key feature of the 8-Minute Rule—and the origin of its namesake—is that to receive payment from Medicare for a time-based (or constant attendance) CPT code, a therapist must provide direct treatment for at least eight minutes. To correctly apply the 8-Minute Rule, you must first understand the difference between service-based CPT codes and time-based ones. You can learn everything you need to know about these codes and the 8-Minute Rule in this guide.

Keep in mind that many commercial insurances use their own versions of the 8-Minute Rule, most of which are fairly similar to Medicare’s.

Helping you adhere to the 8-Minute Rule—by ensuring you’re not over- or under-billing—is just one of the many ways that using an intelligent, PT-specific EMR can add major value to your clinic.

What are X Modifiers, and where can I learn more about them?

In January 2015, CMS issued new guidance for proper use of modifier 59. As part of that announcement, the agency established four new modifiers—collectively referred to as -X{EPSU} modifiers—to better define distinct procedural services. These new codes include:

1. XE (Separate Encounter): A service that’s distinct because it occurred during a separate encounter
2. XS (Separate Structure): A service that’s distinct because it was performed on a separate organ/structure
3. XP (Separate Practitioner): A service that’s distinct because it was performed by a different practitioner
4. XU (Unusual Non-Overlapping Service): A service that’s distinct because it doesn’t overlap the usual components of the main service

To learn more about the appropriate use of the X modifiers, check out these articles.

Can we bill group and individual therapy codes together?

In most cases, Medicare will allow you to bill group therapy codes and individual therapy codes together; however, you must affix modifier 59 to the correct code. While most commercial payers also allow it, you should contact your payers directly to be sure. You can also ask this question during your initial patient eligibility check. That way, you’ll know how to proceed with treatment before it’s time to bill. To learn more about billing one-on-one codes with group codes, check out this blog post.

Are all insurance companies now accepting the new PT and OT evaluation codes?

According to McCutcheon, most insurance companies are now up to speed and accepting the new eval codes. However, some workers’ compensation and auto carriers are not. If you receive a denial for one of these codes, you may be able to call the company directly to have it changed to the old code and reprocessed.

Are there rules that govern billing in-network patients?

There are, and you should review each payer contract in depth to ensure that you’re following those rules. If in doubt, contact the payer directly—or reach out to a healthcare attorney familiar with healthcare contract law.

If a patient fails to provide insurance information at the time of service—and thus, the initial authorization wasn't completed because we couldn't verify the insurance—are we legally able to bill the patient?

In most cases, no. Many payer contracts prohibit providers from billing the patient for a lack of authorization. Thus, to ensure you get paid, it is your responsibility to obtain the necessary information from the patient prior to providing services. According to this article, you may be able get a “retroactive authorization or referral...by submitting an appeal along with the medical records to support medical necessity.”

Documentation Dilemmas

Why is defensible documentation important, and how do I ensure my documentation is defensible?

By ensuring your documentation is defensible, you’ll improve your chances of having a denial reversed after submitting a well-backed appeal. To learn more about the importance of defensible documentation—including tips for keeping your patient records in tip-top shape—check out this blog post and this one.

How do I document medical necessity?

If your documentation is defensible, it should already speak to the medical necessity of the treatment provided. For a more in-depth look at what, exactly, the term “medically necessary” means, check out this blog post. For more defensible documentation tips, check out this blog post.

Front-Office Frustrations

How can I keep my practice’s billing processes organized so claims go out on time and denials are addressed promptly?

We’ve published tons of resources on billing best practices, including this guide to RCM and this post on how to create the perfect billing workflow. We also created this downloadable PT billing guide.

Sometimes, when we contact an insurance company to verify patient eligibility, the insurance company provides incorrect information. How do we handle these situations? Can we use the insurance company’s mistake as the basis for an appeal?

Whenever you call to verify patient eligibility information, always record the name of the person you speak to, the information he or she provides, the reference number, and the date of the conversation. If you’re accessing this information online, save the page that provides the benefits information, and store it along with your patient record. That way, you’ll know exactly who you spoke with—or where you obtained the patient’s benefits information—and when. You can then use this information to submit an appeal should you receive a denial for, say, a missing preauthorization when no one told you the patient required one.

What should I do if I can’t verify insurance eligibility prior to a patient’s first visit—for example, if a patient is a walk-in?

You should verify patient eligibility as soon as you are able, and, in the meantime, collect the copay that is shown on the patient’s insurance card. Also, let the patient know that because the patient is being seen so soon, you haven’t been able to confirm his or her insurance benefits, which means you may need to adjust the amount due at his or her next appointment. It’s also a good idea to suggest that the patient check his or her own eligibility as well, thereby shifting some of the responsibility onto the patient.

Don’t see an answer to your denial management question? Post it in the comment section below, and our team will answer it. Want another opportunity to talk billing best practices? Be sure to attend Ascend 2017—the ultimate conference for rehab therapists—on September 29–30 at the Omni Hotel in Washington, DC. Get your tickets here (use offer code “webinar” for an extra $50 off).