Denials and Rejections in Behavioral Health Facilities: Strategies for Success

behavioral health facility revenue cycle manager sitting at her desk with a laptop viewing denials and rejections

Behavioral health facilities play a crucial role in providing mental health and substance use services to individuals in need. However, one of the significant challenges faced by these healthcare facilities is the high rate of claim denials and rejections. These denials and rejections often stem from medical coding errors and inadequate clinical documentation, which can lead to delayed payments and increased administrative burden. In this blog, we will discuss the intricacies of denials and rejections in behavioral health medical billing and explore strategies to minimize their impact.

Understanding Denials and Rejections

Before we dive into the strategies, it’s essential to understand the key differences between claim denials and rejections:

  • Claim Rejections (Edits): Claims rejections occur at the initial stage of claim processing and do not enter the insurance company’s system. Rejections are often caused by technical errors, such as missing or invalid information in the claim form. Rejected claims can be corrected and resubmitted more easily than denied claims, as they have not yet been processed by the insurance company.
  • Claim Denials: A claims denial occurs when an insurance company refuses to pay a submitted claim. Denials can result from various reasons, including incomplete patient information and incorrect coding. When a claim is denied, it is typically sent back to the facility for correction and resubmission. Denials can cause significant delays in reimbursement and require additional administrative efforts to resolve.

Common Reasons for Denials and Rejections

Now, let’s examine the common reasons why behavioral health facilities experience denials and rejections:
Inadequate Clinical Documentation:
  • Lack of thorough and accurate clinical documentation can lead to denials.
  • Behavioral health providers must ensure that all patient records include comprehensive assessments, treatment plans, and other required documentation.
Medical Coding Errors:
  • Incorrect medical coding, such as using the wrong Current Procedural Terminology (CPT) codes or International Classification of Diseases (ICD) codes, is a frequent cause of denials.
  • Proper training and ongoing education for staff involved in coding and billing are crucial to reduce errors.
Eligibility Verification:
  • Failure to verify patient insurance eligibility before providing services can result in rejected claims.
  • Regularly checking patients’ insurance coverage and benefits can help prevent this issue.
Timely Filing:
  • Insurance companies often have strict deadlines for claim submission. Failing to submit claims within these timeframes can lead to denials.
  • Establishing efficient claim submission processes and tracking deadlines is essential.

Strategies to Minimize Denials and Rejections

To mitigate the impact of denials and rejections, behavioral health facilities should implement the following strategies:
Robust Documentation Practices:
  • Train staff to maintain comprehensive and accurate patient records that demonstrate medical necessity.
  • Regularly audit documentation to identify and rectify any deficiencies.
Ongoing Staff Training:
  • Ensure that staff involved in medical coding and billing receive regular training to stay updated on coding changes and industry regulations.
  • Encourage ongoing communication between clinical and administrative staff to address documentation and coding issues promptly.
Eligibility Verification:
  • Implement a streamlined process to verify patient insurance eligibility before each appointment.
  • Use technology solutions or eligibility verification services to automate this process.
Clear Communication with Insurance Companies:
  • Establish effective communication channels with insurance companies to clarify claim denials and address issues promptly.
  • Keep detailed records of interactions with insurers.
Claim Scrubbing Software:
  • Invest in claim scrubbing software that can identify and rectify errors before claims are submitted, reducing the likelihood of rejections.
Regularly Monitor Denied Claims:
  • Implement a system to track and monitor denied claims, allowing for timely resubmission with corrections.
  • Analyze patterns in denials to identify root causes and implement preventative measures.

Claims denials and rejections in behavioral health facilities can be a significant challenge, but with the right strategies in place, they can be minimized. Robust documentation practices, ongoing staff training, eligibility verification, clear communication with insurance companies, and the use of claim scrubbing software are all essential components of a successful billing process. By addressing these issues proactively, behavioral health facilities can ensure timely payments, reduce administrative burden, and continue to provide vital services to those in need.

MRA (A GeBBS Healthcare Company), has been a trusted provider of technology enabled Revenue Cycle Management services, Cancer Registry services and Risk Adjustment solutions to healthcare providers and Payers nationwide. Our commitment to innovation, coupled with a global workforce exceeding 14,000 professionals, empowers our clients to enhance financial performance, maintain compliance, and elevate the overall patient experience. Whether your healthcare facility requires short-term assistance to address immediate challenges or seeks a long-term partnership for sustained growth, we are committed to delivering the precise level of support and expertise tailored to meet and exceed your financial objectives. Contact us today to learn more about how we can support your needs.

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