Avoid claim denials and maximize revenue with expert billing tips. Streamline insurance submissions with Delon Health’s services

Introduction 

Insurance claim denials are one of the most significant challenges facing small clinics, independent practitioners, and specialty providers. You could be a mental health professional, dietician, speech therapist, ABA therapist, or functional medicine provider, denials disrupt cash flow, create administrative burdens, and affect overall clinic efficiency. 

According to industry benchmarks, up to 30% of medical claims are initially denied, with many denials stemming from preventable errors. Even a single denied claim can delay reimbursement by weeks or months, forcing staff to spend valuable time tracking, correcting, and resubmitting claims. 

The good news? Many denials can be prevented with proper processes, accurate documentation, up-to-date coding, and effective use of technology. Let’s explore the top 10 reasons claims get denied and provides comprehensive strategies to fix them, streamline workflows, and improve revenue. 

1. Incomplete or Incorrect Patient Information 

Accurate patient demographics and insurance details are essential for claim approval. Errors in patient information are the most common cause of denied claims. 

Why It Happens 

Manual entry mistakes during patient intake 

Outdated insurance information provided by patients 

Changes in payer information not updated in EHR systems 

Impact 

Denied claims delay reimbursement and increase administrative workload 

Repeated errors can lead to compliance issues and lower staff efficiency 

How to Fix It 

Implement a Verification Process: Confirm demographics and insurance details at every visit. 

Use Eligibility Verification Tools: Automated systems check patient coverage in real-time. 

Maintain a Standard Checklist: Verify details like date of birth, insurance ID, policy group, and subscriber name. 

Industry Insight: Clinics that use automated eligibility verification reduce denials by up to 20%. 

2. Missing or Invalid Prior Authorization 

Many services require pre-authorization, particularly in mental health, ABA therapy, functional medicine, and physical therapy. Submitting claims without proper authorization results in immediate denial. 

Why It Happens 

Staff unaware of payer-specific authorization requirements 

Delays in obtaining approvals 

Expired or incorrect authorization numbers 

Impact 

Claims remain unpaid until authorization is obtained 

Resubmission increases administrative time and cost 

How to Fix It 

Pre-Authorization Checklist: Track services that require prior approval. 

Authorization Tracking System: Maintain a database with start and end dates. 

Attach Documentation: Include authorization numbers and relevant documents with claim submission. 

3. Outdated or Incorrect CPT/ICD-10 Codes 

Coding errors are a leading cause of denials. Incorrect or expired CPT and ICD-10 codes prevent insurance reimbursement. 

Why It Happens 

Staff not updated on quarterly coding revisions 

Incorrect mapping of services to codes 

Misinterpretation of documentation 

Impact 

Claims are delayed or rejected 

Resubmissions increase administrative workload 

Repeated coding errors can trigger audits 

How to Fix It 

Update Coding References: Use the latest CPT, ICD-10, and HCPCS updates. 

Use Coding Crosswalks: Map services to correct codes systematically. 

Conduct Monthly Audits: Identify recurring coding errors and provide staff training. 

4. Missing Medical Necessity Documentation 

Insurance providers require documentation justifying the medical necessity of services. Missing notes, treatment plans, or linked ICD-10 codes lead to denials. 

Why It Happens 

Staff unaware of documentation requirements 

Incomplete clinical notes 

Failure to link diagnosis to procedure codes 

Impact 

Claims may be denied or underpaid 

Increased resubmissions and administrative cost 

How to Fix It 

Comprehensive Documentation: Include treatment plans, progress notes, and lab results. 

Link Diagnosis to Procedures: Ensure ICD-10 codes match CPT services. 

Audit Charts Before Submission: Catch missing details to prevent denials. 

5. Services Not Covered or Out-of-Network 

Some claims are denied because the services provided are not covered or the provider is out-of-network. 

Why It Happens 

Provider not credentialed with the payer 

Service excluded from the patient’s plan 

Miscommunication about plan benefits 

Impact 

Denials can result in patient billing disputes 

Delays in revenue 

How to Fix It 

Verify Coverage: Check patient plan benefits before services are rendered. 

Maintain Credentialing Database: Ensure provider network status is current. 

Educate Staff: Train on payer-specific exclusions and coverage rules. 

Out-of-network services may still be reimbursed if prior authorization is obtained and patient informed. 

6. Duplicate Claims Submission 

Duplicate claims happen when a claim is submitted more than once, either accidentally or due to follow-up confusion. 

Why It Happens 

Multiple staff handling the same claim 

Confusion between original and corrected claims 

Lack of tracking system 

Impact 

Immediate denial of duplicate claims 

Increased administrative burden 

Risk of compliance audits 

How to Fix It 

Track Submission Dates: Document when and what claims were submitted. 

Automated Alerts: Billing software flags potential duplicates. 

Confirm Claim Status Before Resubmission: Avoid unnecessary duplication. 

7. Incorrect Modifiers 

Modifiers clarify the nature of services, such as multiple procedures or time-based billing. Using incorrect or missing modifiers is a common denial reason. 

Why It Happens 

Staff unfamiliar with payer rules 

Coding updates not communicated 

Misinterpretation of documentation 

Impact 

Denials or reduced payment 

Increased appeals workload 

How to Fix It 

Staff Training: Ensure team understands modifier requirements. 

Reference Tables: Maintain tables for complex billing scenarios. 

Regular Audits: Identify errors and correct systematically. 

8. Timely Filing Limit Exceeded 

Insurers enforce strict deadlines for claim submissions. Late filing often results in permanent denial. 

Why It Happens 

Administrative delays 

Staff unaware of payer deadlines 

Multi-payer systems complicating timelines 

Impact 

Loss of revenue 

Increased appeals and follow-up efforts 

How to Fix It 

Monitor Deadlines: Maintain a payer-specific timely filing calendar. 

Automated Reminders: Set alerts for upcoming claim deadlines. 

Prompt Resubmission: Correct errors immediately and resubmit. 

9. Coordination of Benefits (COB) Issues 

For patients with multiple insurances, COB issues arise if claims are submitted incorrectly. 

Why It Happens 

Incorrect primary/secondary designation 

Failure to attach primary EOB 

Miscommunication about coverage 

Impact 

Delayed reimbursement 

Additional administrative workload 

How to Fix It 

Verify Insurance at Intake: Confirm all coverage details. 

Submit Claims in Correct Order: Primary first, secondary after. 

Attach EOBs: Provide documentation for secondary claims. 

10. Human Error and Communication Gaps 

Human errors, such as missing documentation or misunderstanding payer requirements, contribute significantly to denials. 

Why It Happens 

Lack of standardized workflows 

Inadequate training 

High administrative workload 

Impact 

Increased denials and delayed revenue 

Staff frustration and reduced efficiency 

How to Fix It 

Denial Tracking Dashboards: Monitor claim status in real-time. 

Regular Staff Training: Keep teams updated on payer rules. 

Outsource Billing: Expert billing teams like Delon Health reduce errors and improve revenue. 

Technology & Automation to Reduce Denials 

Automation is key to reducing denials: 

Eligibility Verification Tools: Check coverage instantly. 

Claim Scrubbing Software: Identifies errors before submission. 

Denial Tracking Dashboards: Monitor claim status and recurring issues. 

Automated Alerts: Remind staff of missing documentation, expiring authorizations, or coding updates. 

Revenue Impact of Claim Denials 

Claim denials significantly affect clinic revenue. Consider a clinic submitting 1,000 claims per month: 

Average denial rate: 25% 

Average claim value: $150 

Revenue lost per month: 1,000 x 25% x $150 = $37,500 

Implications: 

Cash flow disruption 

Increased administrative costs 

Potential patient dissatisfaction 

Reducing denials directly increases revenue and efficiency. 

Regulatory & Compliance Considerations 

Compliance with HIPAA, Medicare, Medicaid, and state-specific regulations is essential: 

Secure handling of patient data 

Accurate documentation for audits 

Timely submission according to payer rules 

Staff training on compliance updates 

Industry Best Practices 

Standardized workflows for documentation and billing 

Staff training on coding and payer requirements 

Pre-authorization checklists 

Eligibility verification at intake 

Denial tracking dashboards 

Outsourcing billing to experts for specialized services 

How Delon Health's Professional Medical Billing Services Support Your Practice 

While some psychiatric practices manage billing internally, many find that partnering with a specialized billing service is the most effective way to reduce claim denials, streamline processes, and maximize revenue. Delon Health provides comprehensive medical billing solutions tailored to healthcare practices, including psychiatric and mental health providers. 

What Delon Health Brings to Your Practice 

Specialized Expertise 

 Delon Health’s billing professionals are well-versed in the latest coding standards, insurance policies, and regulatory requirements specific to mental health services. This expertise ensures accuracy and compliance, even in complex scenarios involving psychiatric documentation and nuanced coding rules. 

Advanced Technology 

 Leveraging cutting-edge billing software and direct clearinghouse connections, Delon Health identifies potential claim issues before submission. This proactive approach significantly reduces rejection rates and accelerates reimbursement, keeping your revenue flowing smoothly. 

Dedicated Resources 

 With a dedicated team focused solely on billing, your practice can concentrate on patient care without splitting attention between administrative tasks. Delon Health's experts work to maximize your revenue cycle efficiency while minimizing administrative headaches. 

Comprehensive End-to-End Services 

 Delon Health handles every aspect of the billing process, including: 

Insurance verification and prior authorization management 

Accurate coding and claim preparation 

Electronic claim submission and tracking 

Denial management and appeals 

Patient billing and payment processing 

Detailed reporting and analytics 

Performance Tracking and Transparency 

 Regular reports on key performance metrics; such as rejection rates, days in accounts receivable, and collection percentages, allow you to monitor performance, identify trends, and make informed decisions to improve revenue cycle outcomes. 

Cost-Effective Solution 

 Considering the expenses of in-house billing; salaries, benefits, training, and technology, plus the revenue lost due to errors and claim denials, outsourcing to Delon Health is often more cost-efficient while delivering superior results. 

Conclusion 

Claim denials are a significant challenge for small clinics and independent practitioners. However, accurate documentation, proper coding, timely filing, and the use of technology can reduce denials significantly. 

From insurance verification and coding accuracy to denial management and appeals processing, Delon Health provides comprehensive billing solutions that let you focus on patient care while we handle the complexities of revenue cycle management. Contact us today to learn how we can help protect your practice's revenue and support your growth goals. 

Outsourcing to expert billing teams like Delon Health ensures your practice maximizes revenue, improves workflow efficiency, and reduces administrative burden.