Payers denying healthcare insurance claims is something we all are very familiar with. Whether the claims are denied for missing information, incorrect medical coding, or anything in between, 9% of claims are initially denied, on average.

The national pandemic has caused its fair share of additional denials. New Jersey Hospital Association (NJHA) and Becker’s Hospital Review reported that for 30 acute care facilities in New Jersey, over 1,000 COVID-19 related claims were denied by payers over a 4-month period despite the requirement for services are to be covered by the Center for Medicare and Medicaid Services (CMS).

One hospital reported over 1,500 denied claims related to COVID-19 testing, according to representatives of the hospital. Some of these denials were due to an invalid payment code while others were related to patients testing negative for COVID-19.

With hospitals unexpectedly losing revenue due to the virus, it is important to avoid any additional revenue leakage. Some ways to avoid losing revenue due to COVID-19 include:

  • Be Transparent with Patients

Many patients are unaware of the CMS’s guidelines that proof of medical necessity is needed to be reimbursed for COVID-19 testing. What that means is if a patient is asymptomatic and is merely “curious” about whether he or she has COVID-19, insurance may not cover the cost of the test and the burden is on the patient. The experience shows that there is only about a 35% chance for the providers to be reimbursed for their services. Similarly, insurance companies do not have to cover the costs of testing for a patient to return to work. Presenting this information to a patient prior to testing allows the patient to know the out of pocket costs they may incur and increases the providers’ chance of being paid.

  • Educate Staff

Ensure patient-facing staff have the proper knowledge to identify when a service may not be considered medically necessary in order to notify patients of the cost prior to service. Coding staff should also be trained on COVID-19 related medical billing codes to reduce the chances of denial.

  • Maintain High Quality Standards

With layoffs and furloughs, it is inevitable that the remaining staff must take on extra responsibilities. It’s important to continue with high-quality standards for every element of the revenue cycle. One area of the revenue cycle that should receive special attention is prior authorization. NJ Spotlight found that about 1-in-5 claims were denied in response to a lack of prior authorization. Prior authorization is still required for COVID-19 treatments and related services.

  • Implement the Latest Technology

Keeping up with the latest technology to reduce claim denials will minimize the amount of missed revenue from COVID-19 related denials. Catching possible denials prior to sending the claim to the payer will save healthcare organizations both time and money.

Data-Core Healthcare’s Denial Management Solution uses Artificial Intelligence and Machine Learning (AI/ML) tools in tandem with the traditional rules-based approach to determine the probability and most-likely reasons for the denial of claims. As more regulations are released, our data scientists are continuously updating our model to flag claims for COVID-19 related denial reasons.


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