How to bill home health and hospice claims to help avoid rejections
Many home health and hospice agencies are struggling to maintain their cash flow these days. Rejected claims only compound reimbursement issues. As your payor mix changes and staffing shortages continue to mount, and in the face of ongoing regulatory changes, it’s easy to see how rejected claims can begin to stack up, slowing down your cash flow and impacting your bottom line. Detecting and resolving issues early can help you prevent claim rejections and regain control of your cash flow. Here’s what you need to know about the different types of claim rejections and how to avoid them.
What’s a rejection?
Clearinghouse vs. payor rejections
A billing or claim rejection occurs when a clearinghouse or a payor stops the claim from entering their processing system.
Every clearinghouse has specific checks and balances built into their systems to help “scrub” claims and make sure the data in the claim is correct based on payor requirements. If the claim has missing or incorrect information based on the established checks and balances, the clearinghouse will reject the claim and won’t send it to the payor until you resolve the error. This often results in delayed reimbursement since the payor won’t have received the claim and won’t have a record of it.
Claims that do reach the payor must get past their “front door” to be processed for payment. If the claim is missing information required by the specific payor, or if it contains incorrect information, the payor will reject it but will have a record of the claim.
How rejected claims cost you time and money
Whatever the reason claims are rejected, they can have a negative impact on home health and hospice operations, cash flow and staff. Here are just some of the ways rejected claims cost you time and money:
- Your timely filing window gets shorter
Each payor has its own guidelines for filing claims in a timely fashion. Some payors have a short window of just 30 days while others may have a filing window of 90 days or more. When a payor rejects a claim, your timely filing days are counting down as you work to identify and resolve the issue. - Your staff spends valuable time resolving and resubmitting claims
Since payors have different requirements for submitting corrected claims, your staff may be spending more time than you realize clarifying those requirements. You’ll also need to spend time setting up and updating payor information in your EHR, before resolving claims so they can be resubmitted. It all robs your team of precious time they could be spending caring for patients. - Reimbursement is delayed
The longer it takes to resolve a rejected claim, the longer your reimbursement is delayed. Depending on the volume of rejections, this can create cash flow issues for your agency and impact your bottom line down the road. - Undetected issues continue to cost you time and money
Rejected claims are often a symptom of set-up issues with the payor or breakdowns in your internal processes. When the root causes of rejected claims go undetected and unaddressed, it’s likely you’ll continue to experience rejected claims — and possibly more of them — resulting in an ongoing cycle of work and rework as you identify and resolve errors, then resubmit the claims.
Top 10 claims: Rejections and tips to avoid them
1. Procedure codes (claim or line level), procedure code qualifiers, modifiers, revenue and HIPPS codes
Tip: These are common rejections when the payor is not set up properly. Consult your payor contract or the EDI manual, usually found on the payor’s website. The clearinghouse can often provide additional information about what is missing or incorrect. Once you’ve identified the error, take the time to set up the payor correctly in your system to prevent ongoing rejections.
2. Subscriber information (member ID, demographic info, patient info, release of information)
Tip: This is often the result of an eligibility error or mis-keyed information, such as the member ID number. Verify the patient’s eligibility and be sure you’re submitting the claim to the correct payor ID.
3. Diagnosis, value, occurrence, treatment and conditions codes
Tip: Diagnosis code rejections are often due to using invalid or outdated diagnosis codes. The payor may not be correctly set up in your EMR.
4. Billing provider
Tip: This rejection typically points back to provider demographics, such as an invalid ZIP code.
5. Original reference number or payor claim control number of claim frequency
Tip: The biller is trying to cancel a claim (TOB 328) and submit a corrected claim (TOB 327). Use the payor’s claim number from the original claim when you resubmit the corrected claim.
6. Duplicate of a previously processed claim or line
Tip: The biller has submitted a claim that has already been submitted and is on file with the payor. Instead of resubmitting, call the payor and confirm that the claim is on file. If the payor doesn’t have a record of the claim, contact your clearinghouse for rules on resubmitting a claim.
7. Generic rejection (usually paired with a more descriptive message)
Tip: Review the descriptive message to see why the claim was rejected.
8. Service line information (number of units, unit type, test results)
Tip: This rejection is a specific visit information error. Check the set up in the EMR and correct as needed so the visit information will pull correctly to the claim.
9. Referral/authorization
Tip: This rejection commonly occurs when the authorization is missing or pulling to the incorrect field on the claim form. Depending on your EMR, using characters and spaces that aren’t allowed can also trigger this rejection.
10. Enrollment issue (billing NPI, tax ID, etc.)
Tip: Your agency isn’t enrolled with the payor or through the specific clearinghouse to submit claims. Contact the payor or the clearinghouse to enroll. An incorrect billing NPI or tax ID can also cause this type of rejection.
Tips to avoid common Medicare rejections
Here are some of the most common Medicare rejections seen in home health and hospice agencies, along with tips to avoid them.
Common hospice Medicare rejections:
- Eligibility: Another payor is the primary payor or Medicare coverage is not active. Verify patient eligibility at the beginning of each month.
- VBID (value-based insurance design): A Medicare Advantage plan is the primary payor rather than Original Medicare. Verify patient eligibility at the beginning of each month.
- Duplicate: The claim is already on file. Verify the submission and acceptance of all billing batches so you’re not sending claims more than once.
- Level of care days: Refers to the admission and discharge dates matching the number of days being billed. You can bill only through the actual discharge date and must make sure discharges are correctly entered and in a timely way. There is reporting in the system that can help identify patients with potential discharge issues.
Common home health Medicare rejections:
- Incorrect patient status for discharge: Clinical staff needs to be aware of the correct status to use in each situation. For instance, patient was transferred is a different status than patient discharge.
- Eligibility: Another payor is the primary payor, or the claim contains incorrect or invalid information such as the subscriber ID or date of birth. Verify patient eligibility at the beginning of each month.
- Claim formatting rejections: These typically point to issues with payor set up in the EMR, such as incorrect type of billing, or missing or invalid rev code.
Reducing rejections with new payors
Contracting with a new payor often results in billing delays or rejected claims that keep you from getting paid in a timely way. Follow these tips to reduce rejections with new payors.
Work with the business office to obtain a new payor form that captures the pertinent billing information
– Claims address
– Payor type (Medicare Advantage/replacement, worker’s comp, private insurance, other)
– Payment methodology
– NOE/NOA (required or not?) and specific method of transmittal
– CTI (required or not?)
– Covered services
– Authorization (required or not?), based on daily or visit
– Type of codes if paid per visit
Make all impacted parties aware of the new payor requirements and give them easy access to it
– Monitor the new billing very closely for acceptance and payment at the correct rates
– Reach out to the payor immediately when claims are rejected or denied, and the payor is set up correctly in the EMR
Use the EMR capabilities for documenting and monitoring timely filing deadlines
– Negotiate timely filing deadlines with managed care and private payors
– Investigate your internal processes; timely filing rejections most often originate within the agency
Best practices to reduce and prevent rejections
You may not be able to prevent every claim rejection, but following these best practices can help reduce the volume of rejections and even out your cash flow:
- Resolve rejections within 72 hours
- Establish and communicate processes and accountability
- Resolve the root causes of claim rejections to keep them from recurring
- Identify the reason the payor rejected the claim
- Set up payors correctly and know their billing requirements
- Work with your clearinghouse to establish effective checks and balances
- Make your goal a rejection rate of less than 3 percent
We’re always in tune with current and upcoming payors and regulations to help reduce rejected claims and set your agency up for success. What really sets us apart are the things we see that you might not — things like ongoing eligibility and authorizations, payor set-up, contract reviews, and EMR relationships.
We can manage your home health and hospice billing from end to end so you save time and get paid faster.
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Nancy Cary
Nancy possesses a wide range of experience in the Home Health and Hospice field, including direct involvement in managing various aspects of the revenue cycle such as intake, authorizations, medical records, accounts receivable, and other related positions within Home Care and Hospice agencies. As a Senior Implementation Consultant, Nancy has successfully overseen complex software implementations for McKesson and Netsmart Home Health and Hospice. Her expertise extends to working with payors, particularly Medicare, and she is highly knowledgeable in the specific billing rules and regulations pertaining to Home Health and Hospice.
Before assuming her current managerial role, Nancy served as an A/R Consultant in the Revenue Cycle Division of HEALTHCAREfirst. In this capacity, she utilized her skills and knowledge to implement RCM services for unique and large clients, as well as assisting customers in resolving intricate A/R and billing issues. Nancy's notable strengths lie in her exceptional ability to train, develop, and efficiently manage effective teams.
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