Coding Denials in ASC and how to handle them

Denials are one of the top four challenges facing ASCs today etc. Approximately 262 billion dollars is lost by hospitals each year to denied claims, thereby affecting most Ambulatory Surgery Centers (ASC). Denials could result from errors in patient information, coverage issues, or procedure authorization. Coding denials are the leading cause of denied claims, contribute to revenue loss in healthcare organizations, and are usually preventable. In addition to the revenue lost from denied claims, the time and staff effort to resolve them increase healthcare organizations' overhead costs. Adopting good clinical documentation strategies help prevent such denials. This article lists some coding denials in ASC and ways to tackle such denials.

Incomplete or Missing Information

42% of coding denials result from incomplete documentation. This error can be human or machine-caused. Due to Incomplete or Missing documentation: Only the Level of procedure code will be varied, or diagnosis may be missed. SSN, Demographic will not come under Coding Denial. Ensuring a comprehensive patient chart with correct and detailed patient information is key to avoiding this error. Coders should have access to patients' records, physical documentation, etc. Coders and Clinicians also require constant communication flow to ensure access to correct information. 

If these errors are human, educate the concerned staff on causes and steps to eliminate such errors.

Inclusive/Bundled Denials

ASC payments are bundled together as packages and paid as a lump sum. Some denials result from certain procedures carved out of such packages and need to be paid in addition to the lump sum. To prevent these denials, there is the need to follow CMS covered procedure information as included in the ASC indicator:

• Addendum AA – Final ASC covered surgical procedures, including comments, payment indicators, and final payment amount for CY
• Addendum BB – Final ASC Covered Ancillary Services Integral to Covered Surgical procedures
• Addendum DD1 – Final ASC Payment Indicators for CY
• Addendum DD2 – Final ASC Comment Indicators for CY
• Addendum EE – Surgical Procedures to be Excluded from Payment for CY

Authorization Denials

Authorization denials do not mean unauthorized procedures. The client needs to be educated and get the authorization number before the surgery. Few procedures need to get prior authorization numbers from the respective payers (available at payer-specific portal).

No/Inadequate Coverage by Payer

This type of denial occurs because the stated health care service provider doesn't cover a procedure. This denial happens when ASC performs a procedure omitted from the payments list or excluded from the package bundle provided by the payer. Inadequate payer coverage denials are avoided by contacting patients' insurance to inquire about their coverage before filing claims and following CMS Covered Procedure Information.

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Poor doctor documentation

This clinical coding error results from doctors not specifying the condition's level, leading to an unspecified diagnosis, resulting in a denial. Doctors and clinicians need to be well trained on documentation requirements and regularly reviewed to prevent this type of error.

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Modifier Errors

The lack of inexperienced coders is a leading cause of coding errors. A modifier exists to help communicate additional information about treatment or condition. Unfortunately, modifier errors sometimes occur when modifiers are misused to seek payments. Some modifier errors include:

• Few payers accept 50 modifiers, whereas few accept RT \ LT or two units when the bilateral procedure is performed
• The usage of 26, TC, or Global billing
• Commercial plans may or may not follow CMS policy for ASC claim filing

To handle these errors, use billing service providers and hire trained, experienced coders that keep up with industry standards. In addition, since different payers can use other modifiers, coders should ensure the modifiers used in an ASC claim match the payer and their specific guidelines. If your organization currently has a backlog of denials, here are some strategies to adopt to prevent these denials.

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Payer Specific Denials

• Only implants mentioned in ASC payment indicators and specific payer portals must be coded. Any other implant included results in an inclusive denial.
• Need to follow state-specific local coverage policies. UHC, Aetna, Cigna has their own coverage policy. 
• Before Coding all-payer, particular guidelines need to be followed. Errors like low specificity, neglecting payers' rules, and medical necessity are common errors caused by coders. Coder errors could be diagnosis, treatment, procedure, and modifier errors. Diagnosis errors arise when the coder fails to report the correct diagnosis or all the signs and symptoms of the illness.

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Key Takeaways

- Coding errors are a leading cause of revenue loss in the healthcare sector and have two leading causes: Clinical and coder errors.

- Incorrect or incomplete information is a leading cause of coding errors. To prevent this, coders should have access to well-documented patient records.

- Filing a claim twice or refiling after correcting an error without specifying in the claim will result in a duplication error. Before submitting a corrected claim, identify it as a corrected claim.

- Inadequate coverage by the payer sometimes results in a denial. This error is handled by having insurance check-in with payers before filing claims.

- Lack of specificity or poor documentation about doctors' condition can result in a coding error.

- Inexperienced coders may cause coder errors. These errors could be diagnosis treatment and modifier errors. Educating coders on to use the appropriate codes in Coding to avoid these errors provides a means to handle this.