Key Steps To Maximize Medical Billing Reimbursements

Reimbursement takes a central stage in the revenue cycle management process in medical billing, helping to maintain consistent cash flow and support ongoing operations. This article shares several actionable steps to optimize your medical billing and ensure your organization captures the maximum possible revenue.

The Basics of Reimbursement in Medical Billing 

To get reimbursed for the services, healthcare facilities must prepare clean, error-free claims and send them to the payer for review. The insurance company checks and aligns the claim with the patient’s active coverage. If the services are covered according to the current policy’s terms, the payer will reimburse the provider according to the appropriate rates.

Each insurance payer has its policies that can affect billing and reimbursement. These may include specific requirements, like prior authorization for covered services under specific plans or the use of generic versus brand-name medications. Some services may require additional documentation that proves the medical necessity.

Medicare Reimbursement

Reimbursement in skilled nursing facilities (SNFs) from Medicare has been done under the Patient-Driven Payment Model (PDPM) since 2019. It prioritizes the unique clinical needs of each patient over the volume of services rendered. Key to securing accurate SNF Medicare reimbursement under PDPM is the precise assessment and documentation of a patient’s medical conditions, functional status, and existing comorbidities. These factors are integral in determining the Medicare skilled nursing facility reimbursement rates, ensuring that facilities are fairly compensated.

Furthermore, effective communication with patients about their financial responsibilities is vital. The patient’s obligation might be a sizable portion of the actual reimbursement amount. Medicare Part A covers PDPM fees for Medicare patients. For example, for an inpatient hospital stay patients have a co-payment per benefit period, with no additional costs for the first 60 days of admission. From day 61 to 90, patients pay a coinsurance, which increases from days 91 to 150. After 150 days, Medicare coverage ends, and patients must cover the entire inpatient stay cost.

SNF stays also require co-payment. There is no patient responsibility for the first 20 days. From day 21 to 100, Medicare patients have a co-payment of $204 per day in 2024. Beyond day 100, patients must bear the costs, unless they have a secondary/supplemental insurance. Medicaid might also cover the stay in an SNF for these patients, but not the treatments.

Dual-eligibile Beneficiaries

Billers should also consider dual-eligible beneficiaries, and it’s crucial to understand the coordination between Medicare and Medicaid. Medicare serves as the primary payer, covering eligible services first. Medicaid acts as a secondary payer, assisting with out-of-pocket expenses and costs not covered by Medicare.

When admitting a dual-eligible patient, always verify the coverage available to avoid sending claims to the wrong payer, as it can significantly delay the reimbursement.

Early and clear discussions regarding insurance coverage, co-payments, and deductibles are crucial to avoid losses associated with patient non-payment.

Prompt submission of claims is also essential for healthy revenue cycle management in medical billing. Delays can lead to denials, interrupting the reimbursement process. Addressing and resubmitting any denied claims quickly is equally important, safeguarding against unnecessary revenue loss.

How do medical billing and coding regulations affect reimbursement in a healthcare organization?

Medical billing and coding rules set the standards that healthcare organizations must follow. Here’s how they may affect reimbursement:

• Accuracy in Coding: Key coding systems such as ICD, CPT, and HCPCS facilitate the communication of medical diagnoses, service understanding, and reimbursement determination. Errors in coding may confuse services provided, leading to claim denials. Errors in coding may confuse services provided, leading to claim denials.
  • Precision is also required when working with PDPM components, as they influence Medicare skilled nursing facility reimbursement rates.
• Modifier Use: Regulations also oversee the use of modifiers in coding, indicating alterations to services or procedures without changing their definition. Accurate modifier usage can influence reimbursement by providing additional justifications for higher payment rates or clarifying circumstances to prevent claim denials.
• Up-to-date Knowledge: Given the regular updates to coding regulations, monitoring changes is essential. Using outdated codes risks claim denials and delays the billing and reimbursement cycle.
• Compliance with Payer Guidelines: Some insurers, like Aetna and Cigna, maintain specific guidelines beyond general standards. Your team must be familiar with them to avoid mistakes affecting medical billing and reimbursement.

Steps to Maximize Reimbursement in Medical Billing

Follow these practical steps to ensure your healthcare organization captures the maximum possible revenue through medical billing.

Step 1: Embrace Automation for Eligibility Verification Process

Verify patient’s insurance eligibility and understand their coverage details beforehand. This step is crucial for revenue cycle management in medical billing and helps prevent future complications by confirming whether the patient’s specific services are covered. We suggest automating this process to save time and minimize errors, as modern tools can provide real-time verification of the patient’s insurance status, coverage limits, copays, or deductibles. This reduces the likelihood of errors stemming from overlooked eligibility and assists in preparing the claim, considering the most current insurance status.  

Step 2: Establish a Coverage Tracking Process

Insurance verification shouldn’t be done only once, as changes in Medicare and Medicaid coverage often happen after the patient has already been admitted. Therefore, you need to regularly track updates to patient policies to avoid future medical billing reimbursement issues.

Manual tracking will consume too much time and effort for the billing staff. Look for a tool that automates this process and sends notifications whenever changes occur. Such technology decreases the risk of missing out on a change, as the staff won’t have to monitor multiple policies manually.

Step 3: Ensure Detailed Documentation of Patient’s Care

Every treatment, test, and procedure should be documented thoroughly in the patient’s medical record. The payer may require this documentation, which will help to justify the claim. This is especially vital when a patient receives a complex procedure, like IV antibiotic administration.

Step 4: Prepare The Claim Using Accurate Codes

Prepare the claim based on the documented treatments and procedures. This step is vital for revenue cycle management process in medical billing and involves translating the documented medical services into standardized codes recognized by the payers. Assigning the correct codes ensures that the services provided will be properly reimbursed.

Review the claim data and codes very carefully. We advise organizing a dedicated documentation review process, which will ensure accuracy. Remember that SNFs use the institutional claim forms and are required to use Revenue Codes and HIPPS that reflect the provided care most accurately.

Step 5: Submit Claims Timely

Establish a process to ensure that all claims are submitted within the payer’s designated timeframe (e.g., within 365 days of service for Medicare). This practice is essential for maintaining a steady cash flow. Automated medical billing systems can effectively track these deadlines, enabling the setup of alerts to prompt staff for timely claim submissions. We advise you to research different software options to find the one that best fits your healthcare practice’s specific needs and size.

Step 6: Follow up on Submitted Claims Diligently

Sometimes, claims can be delayed, lost, or require additional information. Establishing a routine to check the status of claims, especially those that haven’t been acknowledged or paid within a typical timeframe, can uncover issues that can then be promptly addressed.

For example, the billing team can notice a delay and find that more documentation is needed because of the complexity of the procedure. This allows them to quickly gather the required documents and send them in to speed up the evaluation. As a result, the claim gets approved, and prompt reimbursement is ensured.

Step 7: Handle Denials Effectively

If you eventually get a denial, don’t give up. There is still a chance you might get reimbursed. First and foremost, understand the reason for the denial: whether it is a minor error that can be corrected for claim resubmission or if the issue is more complex and requires an appeal.

In many cases, claim corrections can be enough, such as replacing an incorrect procedure code with the appropriate one. Submit the revised claim and briefly note the changes made.

If you need to appeal the decision, gather as much supporting documentation as possible, including clear medical records. Be proactive in addressing any requests for further information or clarification.

How Approved Admissions Can Help You Maximize Reimbursements

Previously, we highlighted the benefits of leveraging technology to optimize the medical billing reimbursement process. Approved Admissions can assist you with the critical initial step by automating eligibility verifications. Our eligibility verification tool provides real-time insurance checks anytime, anywhere, ensuring you have the most up-to-date patient information and understand their current coverage status. This data will boost your confidence in securing reimbursement for provided care and enable you to prepare accurate claims.

The tool sends automatic notifications whenever a patient’s coverage changes, preventing oversight of new updates. This proactive approach minimizes the risk of submitting incorrect claims, which could result in denials and refusal of reimbursement. In just a few months, Approved Admissions identifies over 18,000 Medicare terminations, reinstatements, and over 42,000 Medicaid patient responsibility changes.

Key Points To Remember

Maximizing reimbursement in medical billing requires a proactive approach. Firstly, it’s crucial to establish a clear and efficient eligibility verification and coverage tracking process to ensure accurate and up-to-date insurance information from the start. Be prepared to create detailed patient care documentation, as it may be beneficial for justifying claims later on.

Be very attentive when preparing claims and double-check the codes. We recommend checking CMS updates regularly, as there might be changes in particular code groups.

Don’t hesitate to use automation; it can significantly simplify the work and help you maximize reimbursements, as manual errors will be minimized.