Whether you’re new to insurance billing for wellness services or a billing expert, claim denials are a normal part of the billing process. The important thing to do is not panic — claim denials and errors happen. The mistake could be as simple as a typo, or a system error on behalf of the insurance payer. While denial reasons can be somewhat convoluted, we’re here to help you have a successful plan for managing denied insurance claims for nutritional care.
In this article, we explain common reasons for insurance denials, when to resubmit a claim, and how to collect payment from clients for non-covered wellness services.
1. Troubleshoot the claim denial reason
Ok, you’ve received an insurance claim denial. The reason on the explanation of benefits (EOB) may be obvious, or the language could be convoluted — making it near impossible to decipher the reason. Contacting the network manager is the next best step in understanding the denial reason. Each insurance payer as a network manager, and once you have the contact information for this person, you’ll want to keep it securely filed away.
Although there are many reasons why your claim could have been denied, here are some most common reasons:
Claim wasn’t scrubbed
If you use a clearinghouse, then normally your claims are scrubbed — simply meaning that the clearinghouse scanned the claim and will notify you if there are any obvious errors. If you’re reviewing claims yourself, or not using a clearinghouse, there may be easy issues that were overlooked (ie. a field was left blank, or a number was entered incompletely). Search for these errors first, and resubmit the corrected claim as needed.
Errors happen, and sometimes it’s just the technology. If this is your first time submitting a claim to this insurance payer, make sure that you’ve submitted it through the correct portal or clearinghouse. Sometimes there was simply an error in how the claim was processed by the insurance payer — requiring you to submit the claim again to be re-processed.
Client does not have benefits for the diagnosis or CPT code you billed
If you’ve received an error like “the ICD diagnosis does not support the submitted procedure code” then most likely, your client doesn’t have covered benefits for the primary diagnosis code you’ve submitted. Keep in mind, insurance processes claims based on the primary code. If there are other diagnosis codes for your client, you can try submitting the claim with a different code.
In the case that you spoke with a representative to confirm benefits and were told that your client was covered — then it’s time to give the payer a call back. Give them the reference number from your benefits verification call as support for the information provided to you by the initial representative.
Pro-tip: Always document the reference numbers for your calls with insurance payers. Make a note in your client’s chart with this information, so you can easily refer back to it in the future.
Prior authorization or referral was not obtained
For some insurance payers, you (or your client) must contact the payer in advance to receive an authorization code. This basically confirms that your services will be covered, and provides you a way to document that this has been done.
In regards to referrals, some membership/group plans require a referral from your client’s MD. If this referral is not obtained, then you will receive a denial for the services you provided. In these cases, it is the wellness provider’s responsibility, and you will not be able to legally collect payment from your client for the denied service.
2. Resubmit the claim on behalf of your wellness client
If you’ve received a denial, you have the option to submit it again. Depending on the denial reason, you may only need to resubmit the claim with any corrected fields. For nutrition professionals, claims may be denied if a client does not have coverage for a specific diagnosis code, so oftentimes resubmitting the claim with a different primary diagnosis is the key.
Keep in mind, there is typically a time-frame in which a claim can be resubmitted ie. 30 days from receiving the initial denied claim.
3. Appeal the decision when necessary
If you’ve submitted your claim again and received another denial, it may not be the end of the road. You can call or fill out a form with the insurance payer for an internal or external appeal. The Affordable Care Act requires that states set up an external review process for denied medical claims.
Appeals can help resolve issues where your clients should have covered benefits but were denied. For example, a representative misquoted benefits during your verification call, and you have the reference number to support it. You could also submit a “letter of medical necessity,” from you and/or your client’s medical doctor to help support your appeal. While not all appeals will win, it may be worth your time (or your client’s time) to continue fighting for reimbursement.
4. Communicate your financial policies to clients
Building a relationship and working with your wellness clients is important work — and when clients are using their insurance, they aren’t expecting to pay out-of-pocket for your services. It can sometimes be many months into working together when you receive a denial claim, which can be shocking or upsetting to your client.
Clearly communicating your financial policies is essential for retaining your client, and maintaining the good rapport you’ve established. Your financial policies should be succinctly written in your Financial Agreement Policy form, and provided to your client to review (and sign) as part of your new client paperwork.
Typically for insurance-based practices, a Financial Agreement form will clarify:
- That it is your CLIENT’S responsibility to verify and understand their insurance benefits
- Clients are responsible for any client-owed responsibilities such as copays, deductibles, coinsurances, and denied services.
- If you’ll re-submit denied claims on behalf of your client in an effort to resolve the claims issue
- If a credit card is required on file for your client
Some additional considerations may be to disclose self-pay rates for services or to mention if you’ll provide a discount on self-pay rates if an insurance claim is denied. It’s up to you to decide how transparent to be about your pricing, but in general, clients appreciate knowing what to expect in the event that your services are not covered.
5. Collect any client-owed responsibilities
At this point, you’ve made your financial policies clear to your client, attempted to resubmit the claim, but have still received a denial. It’s time to collect payment for your services.
Your first question will likely be: how much do I charge my client?
There can be a few ways to go about pricing your sessions after insurance has denied coverage:
- You receive the EOB for your session, and you charge your client the “client responsibility amount” (this equals your contracted rate)
- You charge your client your full self-pay rate
- You charge your client your self-pay rate but offer a discount (ie. 10% OFF)
Choose the financial structure that works best for your practice — but again, as a best practice, it’s good to be consistent with this policy and to spell it out clearly to clients. One thing to note, for some insurance payers, it may be specified in your contract that if a client has benefits but has exhausted them — that you must offer them your contract rate. Beyond that, your client is subject to your self-pay rates.
There are cases where you will not be able to collect any payment, typically indicated by an EOB that reads “client responsibility: none.” This may happen in instances where a referral was not obtained from your client’s MD, and your client cannot be penalized for this oversight. While it may be frustrating, it is not legal to charge clients if insurance indicates that they owe no responsibility.
Whether the claim was partially or fully denied, or there are other client-owed responsibilities, you’ll need to collect payment. Send the client an invoice, and be transparent about why they are receiving an invoice — this will give your client the opportunity to resolve the denied claim directly with their insurance beneficiary. For many wellness practitioners, collections is a time-consuming process, especially when self-managing the work. To ensure payment for services and spend less time in collections, many providers require clients to put a credit card on file.
Regardless of the financial policies that you put into place for your practice, being clear about them will help ensure positive interactions with clients, even if they’ve had a denied insurance claim.
Leverage Healthie to Collect Client Payments
Healthie is an all-in-one practice management and EHR platform for nutrition and wellness professionals. Have all of the tools you need to run your practice, with flexible billing tools for both insurance-based practice and self-pay services. Healthie’s HIPAA-compliant features allow you to:
- Create new client paperwork for clients to complete electronically
- Create and submit CMS1500 claims
- Send and receive E-Fax documents
- Create invoices and process client payments for self-pay services
- And more
Make more time to grow your business.
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