Effective Strategies to Reduce Claim Denials for Your PT Clinic

Denials are a common issue for many physical therapy practices and can significantly impact resources and cash flow. To tackle this issue, including those related to medical necessity, it is essential to use proactive measures to prevent denials.

Getting claims paid quickly is essential for the financial health of a PT clinic. However, many practices do not track or follow up on denied claims and just wait for reimbursements. Over time, this lack of attention can reduce revenue, leading to more work for less pay. 

Let us understand the common reasons behind claim denials:

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8 Proven Strategies to Minimize Claim Denials

As nearly 90 percent of claim denials can be avoidable, focusing on prevention will be highly beneficial. The following steps will help create an effective claim denial management plan and streamline the billing process in a physical therapy clinic:

1. Verifying Patient Insurance Eligibility

Verifying insurance eligibility before each patient's appointment is crucial to avoiding claim denials. Ensuring that the most current insurance information is obtained, confirming that the patient's plan is active and in good standing. Certain insurance policies may have limitations or exclusions for specific PT services, and verifying eligibility can help anticipate potential billing issues. While this can be time-consuming, technology advancements like insurance verification make it easier.

2. Training Staff Regularly 

Proper training in payer billing and coding is crucial for error-free claims submission. 

• Regular updates keep the team informed and consistent, reducing the risk of claim denials that can impact revenue and reputation. 
• Alternatively, using an outsourced system with code validation can minimize errors and streamline the billing process, allowing staff to concentrate on patient care. 
• Prioritizing training and accuracy ensures a smooth billing workflow and improves clinic performance.

The following table outlines key training aspects to ensure staff are well-prepared and informed:

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3. Correct Coding Practices

Using the correct codes and most recent procedure and diagnosis codes in all billing activities is essential. By keeping the staff well-informed and accurate, the chances of successful claims submissions improve significantly.

UnitedHealthcare coding policies: UnitedHealthcare follows specific coding systems, such as the Current Procedural Terminology (CPT) and Centers for Medicare and Medicaid Services (CMS) guidelines, to develop rules on how they reimburse healthcare providers for services. These reimbursement policies apply to healthcare services that are billed using two types of standardized forms:

1. CMS 1500 forms: Typically used by healthcare providers, like doctors and therapists, to bill for outpatient services.
2. UB04 forms: Used mainly by hospitals and other institutional providers for billing.

UnitedHealthcare bases its payment decisions on the codes entered in these forms, ensuring services are properly coded for accurate reimbursement.

4. Improving Documentation Accuracy

Thorough and accurate documentation is essential for successful claims processing. Documentation should be clear, concise, and detail the medical necessity of services provided. It should include the patient's diagnosis, treatment goals, progress made during each visit, and the care plan. Regularly auditing notes or using a system for this can help improve standards. Avoiding vague or inconsistent documentation can significantly reduce the chances of claim denials.

Here is a table showing poor documentation and ways to improve it:

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5. Leveraging Technology

Investing in advanced PT billing software and practice management tools can significantly streamline clinic operations. These tools automate key processes, track claims in real-time, and verify insurance eligibility efficiently.

By using advanced solutions, clinics can improve accuracy in claims management, reduce administrative burdens, and ensure timely reimbursements.

How advanced solutions enhance PT billing and practice management:

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6. Medical Necessity Guidelines

Verifying that all treatments adhere to the medical necessity standards defined by insurance providers. Keeping current with the latest guidelines and requirements to ensure that the services offered are well-supported and justified. This approach helps to minimize claim denials that may occur due to inadequate medical justification.

7. Understanding Payer-Specific Requirements

Each insurance company has distinct policies and procedures for physical therapy services, including specific billing codes, coverage limits, and documentation requirements. To minimize claim denials, it is crucial for staff to be familiar with these payer-specific guidelines and stay updated with any changes. Regularly reviewing payer communications, newsletters, and websites to ensure compliance with the latest regulations and maintain accurate billing practices.

8. Implementing Pre-authorization and Denial Management

Setting up clear processes to get pre-authorization before offering certain services to avoid denials. Creating a system to track and address claim denials by identifying common issues and making changes to prevent them in the future.

In conclusion

If repetitive billing tasks are causing frustration and taking valuable time away from patient care, SPRY provides a powerful solution. SPRY’s billing software is designed to simplify and automate the claims process, effectively reducing claim denials and streamlining administrative tasks. 

Visit the SPRY blog to know how you can transform billing operations and optimize practice performance.

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