How To Avoid The Most Common Mistakes That Cause Claim Denials

Oct 20 | , , , , , ,


Claim denials harm revenue cycle management and cash flow in a physical therapy clinic. Because claims are processed all the time, errors may slip through the cracks. Without a vigilant denials monitoring process, providers can run into significant issues. According to the Medical Group Management Association, top-performing clinics have denial rates lower than 4.05 percent. If your clinic’s denials rate is more than 4 percent, it’s time to assess what’s going on with claims and identify areas for improvement.

“Top-performing clinics have denial rates lower than 4.05%.

Denial rates are expected to increase substantially, at least temporarily, because of ICD-10.

What are the most common causes of claim denials?
Human error and incomplete forms often lead to denials. Claims can be denied because of something as simple as patient name misspellings or incorrect dates of birth. While these errors are often caught after the clinic receives a denial and can be resubmitted, claims take longer to process, which harms cash flow.

Outside of small mistakes, leaving certain information about a patient visit off the form may cause payers to deny the claim. For example, if the claim is missing a modifier, prior authorization or the effective time period, it may be denied, Medical Economics stated.

Another crucial mistake is resubmitting a claim before receiving reimbursement or a denial. Resending a claim when an insurer hasn’t responded prolongs the processing time, according to Healthcare Finance. Payers will almost always reject both claims. After checking the denied claim form for errors, physical therapy practices can then resubmit, but this still delays reimbursement.

Filing claims late contributes to denials, which is particularly frustrating for smaller practices. In hopes of securing larger reimbursements, many practices prioritize larger claims and wait to file smaller claims. If front office staff members forget to file these claims before the deadline, the practice may miss the time limit. It’s even more challenging when clinics work with multiple payers because each one has its own time frame for claim submissions. In some cases, clinics file on time, but payers say they didn’t receive a claim before the deadline. Clinics may need to hold payers accountable for this type of denial by keeping detailed records of submitted claims.


It’s crucial to understand why claims are denied.

How can physical therapy clinics minimize denials?
Training front office staff members is an important step to decrease your clinic’s denial rate. Double-check to ensure all the required fields on claims forms are filled in before submitting claims. This can help you catch and correct common errors. It’s also important to review the timelines for claims submissions for each payer to avoid missing the limit.

Clinics can use preverification to check in advance to ensure services are covered by a patient’s insurance. This form of claim denials stems from services that are ineligible under a patient’s health care plan. While clinic staff can’t be expected to memorize exclusions in each health plan for multiple carriers, it may help to be aware of the most common exclusions for major insurance providers. Practice staff should verify coverage whenever there is a question.

If a claim is denied, your practice staff should review the form and appeal. According to the MGMA, only 35 percent of practices appeal after receiving a denied claim. Payers sometimes deny claims in error, causing providers to leave money on the table. Studying each denied claim can help physical therapy practices establish stronger denials management protocols, especially because different appeals are most effective for each payer. Always approach denials in a timely fashion to maximize the chances of a successful appeal.


This article is brought to you by PREFERRED Therapy Providers Inc. PREFERRED is the nation’s leading payor management services network. Our expertise is working with physical, occupational and speech therapy practices – from single clinics to multiple clinic locations.