Denials- What We Know

By Diane McCutcheon, President


Denials, unfortunately, are a way of life in the billing world but it doesn’t have to be that way.  As a billing company for physical therapy, we see our share of denials.  What we see is very likely what in-house billers see, but it is how you handle them along with making the necessary changes that can decrease them.  Denials are not as mysterious as you might think.  The majority are due to simple errors that can be eliminated when everyone in your organization takes part in the entire administrative process, pays attention to detail and communicates.


  • Name or address is spelled wrong or not entered exactly as on insurance card
  • Date of birth or date of injury is not accurate
  • Insurance member or claim number was entered wrong
  • Wrong therapist entered as assigned therapist


And the list goes on.  Any one of these errors will cause a delay in processing the claim. When you have to go back to the source to correct the information, you are now paying for the job to be done right a second time.

We also get a surprising number of denials due to the therapist:


  • Not being set up correctly in the billing system
  • Not being credentialed- (no provider numbers)
  • Provider information not being connected to their NPI number
  • Not being set up with the clearing house and approved for sending claims electronically
  • Documentation is not compliant


These denials can get complicated and they take a little longer to fix and get paid on.  Once again, it is costing money to get it right the second or third time.

Therapists must be sure that they are providers before seeing patients in network.  A therapist cannot do the work and bill under another therapist.  There are circumstances where co-signing may be acceptable but that means knowing ahead of time what the requirements are before patients are seen.  If a claim is denied because the treating therapist is not a provider, you cannot take that claim and resubmit under another therapist – those initial claims will be denied and most likely end up being written off. 

Denials due to not having a referral or authorization on file are becoming more problematic in that more and more insurances are not able to back date them.  If that happens, you will not get paid for the visit.

Another rising issue is claims being denied due to patients not being eligible for therapy.  This happens because benefits were not checked thoroughly before the patient was seen.  They may not have either in or out of network benefits, benefits are exhausted for the year, their plan was terminated or their new insurance plan was not entered into the billing system when the information was obtained.  Many Medicare patients are denied because we bill Medicare when we should have been billing a Medicare Advantage plan.  This information needs to be clarified when the patient schedules the first appointment.

Other denials we see regularly include:


  • Referring physician is entered without a NPI number.  All physicians must have a valid NPI number or your claim will be denied
  • Missing, incomplete or invalid charge
  • Correct modifier not attached to code
  • G-codes missing
  • Services not deemed medically necessary
  • Timely filing – claims not sent within the required number of days to be accepted


All of these denials are a result of processes being broken down and the administrative process not running seamlessly.  Denials can be drastically reduced by everyone working together and in particular:

Front desk must:


  • Obtain correct information from the first phone call
  • Provide an exceptional level of efficiency when entering patient data
  • Schedule with a qualified, credentialed therapist
  • Check benefits prior to a patient’s first visit and obtain accurate insurance information
  • Ensure that the initial referral and authorizations is in place before the patient is seen
  • Communicate any patient issues with biller and/or therapist


Therapists must:


  • Make sure they are properly credentialed – even though many companies assist in the process, it is the therapist’s responsibility to make sure they have provider numbers and that they understand their responsibility as a provider under each carrier
  • Understand the billing requirements of each carrier including Medicare
  • Understand what “medically necessary” means
  • Understands how to use CPT and ICD-9 (and soon ICD-10 codes)
  • Be clear on documentation guidelines
  • Communicate with the front desk and/or biller regarding any insurance or billing issues


Biller/Collector must:


  • Process claims daily
  • Apply payments daily
  • Address all denials daily
  • Manage the accounts receivable
  • Communicate with front desk and or therapist regarding denials


Management must:


  • Make sure processes are in place and followed to ensure that payments are received for every service provided
  • Hold employees accountable for their work
  • Provide necessary tools for employees to do their job – training and development


The bottom line is that every denial costs money, money that employers should not have to lose.  So many denial can be avoided.  The best billing system in the world cannot fix these human errors.  Good information in, good results out. 

If you are not at the level you should be give us a call so we can get training started for your employees in our Administrative Power Center (APC) Training Facility.  Click here for APC details.

Diane McCutcheon, President
DM Business Management Consulting Services, Inc.
Account Matters – Billing & Collection Services
4 Charlesview Road, Suite 4
Hopedale, MA 01747
P: 508-422-0231  F:  508-422-0234
diane@dmbmcsi.com

Here are some interesting facts of the denials our billing company sees every day.  Most of the errors we see are due to data entry errors – missing, invalid or incomplete information.  This can be related to the patient, therapist or referral source.  

If patient information is not verified at the very beginning of the patient’s care you are likely to see denials for things such as “cannot recognize patient as their insured” because: