DME Medical Billing Errors May Be Killing Your Cashflow
Learn How to Improve DME Billing and Collection Rates
DME billing is a complex process that differs based on payor guidelines, the patient, and the HCPCS and DME products that you are billing for. With increasing regulatory scrutiny from Medicare Audits, payor network reimbursement compression, and COVID-19 it is more difficult than ever to deliver effective training, drive knowledge deep into your organization, and achieve financial excellence.
Medicare alone loses $60 billion per year in erroneous billing.
CMS has stated that 30% of claims are either denied, lost, or ignored.
Out of all denied medical claims, it is estimated that 65% of them are never resubmitted.
The Healthcare Information Management Systems and Society states that 86% of billing mistakes are administrative.
What are DME medical billing errors costing your DME business?
The most common errors in DME billing are as follows:
Patient Data Input
Patient data input errors cause erroneous insurance verification denials, missing pre-auths and PAR denials, billing address errors, and overutilization and non-covered denials.
Insurance Verification Errors
As stated above, insurance verification errors can be generated from erroneous errors in the patient’s name or address. Missing information from an electronic verification vs. a verbal verification, such as: pre-auth requirements, buy downs, DME caps, anniversary dates, same similar, unauthorized services, and coverage termination errors.
Coding errors are a common cause for medical billing denials. Medicare, specifically, has LCD specific policy approval requirements and if your required ICD-10 is not listed as the primary ICD-10, the system has an edit to deny. If you are providing a specialty DME product, such as a Urinary Coude Catheter, your primary ICD-10 must be retention or incontinence and your secondary ICD-10 must address why the patient needs a coude catheter.
We see modifier denials all the time. Either putting the wrong modifier on the medical claim, missing a billing modifier, or not putting the correct sequence of modifiers on your 1500 form.
Lack of Documentation
Lack of, or missing, Medical documentation is an ongoing challenge in the DME billing world. Medicare, Humana, UHC, amongst others are all focused on medical documentation and are launching payor audit after payor audit to recover medical billing claims. Add to that the balancing act that a DME business owner must do in order to obtain medical records and not upset their referral sources and you can easily understand the challenge. It is important to note to train your referral sources on what is needed, why it is needed, and when it is needed so you can partner together to reduce unnecessary outreach attempts and medical documentation denials and recoupments.
Timely Filing Denials
As stated in the beginning of this article, there are many different variables that DME billing companies must solve for, one of them is timely filing requirements. Each payor has a different timely filing requirement that must be met or the DME claim will be denied. The more payors you bill DME claims to them, the more timely filing variables. You must learn your timely filings requirements and have an effective process in place to plan for and meet their deadlines.
Lack of Collection Efforts
65% of denials are never reworked*
58% of single insurance plan patients have a deductible greater than $1,000**
78% of family insurance plan patients have a deductible greater than $1,000**
68% of patients did not pay off their medical bills in full in 2016***
30% of the average healthcare bill comes from the patient’s pocket****
Not having an effective collection campaign, for both payor aging and patient aging is not an option if you want a profitable DME business.
Training, expertise, oversight, and effective process can have a dramatic positive impact to your DME billing rates, as well as, your DME collection rates. You must stay up to date with payor guideline changes, LCD and Medicare policy updates, and have robust medical claim denial reporting.
About The Author:
Michael Breslin is the EVP at Boost Advisory Group, a leading DME consulting group that specializes in DME billing services, DME operational outsourcing services, Brightree consulting, DME training services, Medicare and Payor Audit Defense services, and DME Licensing and Accreditation Services.
* Change Healthcare
** Black Book™ 2017 Revenue Cycle Management Survey
*** America’s Health Insurance Plans: Health Savings Accounts and High Deductible Health Plans Grow as Valuable Financial Planning Tools
**** The Rise of Self-Pay Accounts, The Association of Credit and Collection Professionals, Collector Magazine, February 2015