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5 Common Reasons for Payment Denial in Physical Therapy Billing

by Cherie McCord

Running a physical therapy practice can be rewarding since they are among the most demanded specialty medical services. While your primary focus is on helping patients, other aspects of the business, like financial management, determine your practice’s success. Investing in physical therapy billing services can help prevent losses that result from claim denials. Here are five common reasons for payment denial in physical therapy billing.

Table of Contents

  • 1. Eligibility Concerns
  • 2. Inability to Establish Medical Necessity
  • 3. Delayed Claims
  • 4. Data Entry Errors
  • 5. Improper Diagnosis Coding
  • Invest in the Best Physical Therapy Billing Services

1. Eligibility Concerns

When a new patient comes in for a physical therapy session, the practice must record their details to open a medical file at the facility. Doctors have to confirm patient eligibility, but some may skip this step since it can be hectic. Eligibility issues that arise when processing claims can result in denials. Rejected claims occur when patients are not eligible for the specific services a physical therapist offers and bills for.

Patient eligibility concerns often arise when a patient’s coverage had not yet started or was already terminated at the time they got therapy. Healthcare billing services avoid this by verifying clients before their first appointment. You should also conduct eligibility verification regularly to make sure the coverage remains active throughout treatment.

2. Inability to Establish Medical Necessity

Medical necessity refers to critical supplies or services that experts require to diagnose or treat a patient’s condition or symptoms. Such equipment and special services must meet the accepted medical standards and relate directly to the patient’s illness. Other requirements that medically necessary services must meet include:

  • The services should be completely safe and effective for the patient.
  • They must meet the patient’s medical needs.
  • Services included in the claims can only be completed by a skilled therapist.
  • There is an established frequency or duration of treatment to meet the recognized standard practices.

If a charge is offered for specific services outside the normal course of medicine, it must be accompanied by proper documentation. Failure to include proof of service delivery and the clinical reasoning behind the expert’s plan of care can result in claim denials. You can avoid this by documenting the functional progress of your patient throughout treatment. Identifying instances in treatment that require extra attention can help support the medical necessity for special treatment.

3. Delayed Claims

Some insurers are particular about the timeframe within which doctors can submit claims. Failure to submit claims within the specified period can result in denials. Delayed claims are common when healthcare providers miss filing due to misplaced or incomplete bills. Billing services can help itemize patient service lists and charge tickets, allowing you to file claims on time.

4. Data Entry Errors

When fulfilling claims, insurers must confirm that all patient details align with what they have on their database. Data entry errors create disparities within the confirmation process, resulting in rejected claims. Common data entry errors include:

  • Misspelled names
  • Incorrect demographic information such as the date of birth, insurance information, or gender
  • Wrong ID or Social Security number
  • Submission of duplicate claims
  • Inaccurate provider information such as physical address and NPI

Denied claims can create a back-and-forth process between the payer and service provider, which can be overwhelming. Using billing services helps avoid data errors by verifying client details and consolidating them on different documents. This allows you to send clean claims the first time, decreasing claim denials.

5. Improper Diagnosis Coding

ICD-9 codes are often general and often cause coding errors. Unspecified diagnosis codes on the claims can result in denials. Recent billing systems are adopting the ICD-10 diagnosis code set to reduce coding errors since it is more specific. ICD-10 codes accurately indicate the specific body region that the physical therapist treated and the type of service they offered.

Medical providers must avoid misusing the 59 modifier during the diagnosis coding process. Combined CPT codes should include supporting documentation to avoid claim denials and the possibility of an audit. Proper diagnosis coding prevents errors and helps you avoid denials. Medical insurance providers can go through the care plan and verify that the services meet the required standards of care.

Invest in the Best Physical Therapy Billing Services

Rejected claims can result in significant financial losses for your physical therapy practice. Knowing common reasons for claim denials can help you address weaknesses in your system and improve the billing process. Invest in top-rated physical therapy billing services to enhance revenue cycle management. An improved billing process allows you to focus on quality service delivery for your patients.

Filed Under: Health

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