Underpayments occur when a health insurance fails to reimburse a provider the full requested/contracted amount. This failure can result in long-term financial problems for ABA agencies. Therefore, ABA practices must develop a clear understanding of underpayments and how to handle them.
Here’s what to do when you receive underpayments for ABA services.
Insurers are always looking for a reason to deny claims. Careless billing makes it easy for the Insurance to spot errors and either deny or make a partial payment. As such, ABA agencies must be wary of common underpayment causes:
● Missing information: Billers sometimes leave out critical information that supports the claims. Early in the scheduling process, note what documentation is needed to receive full reimbursement.
● Insurers miscalculating payment: Insurers may come to different monetary conclusions when reviewing a therapy service. Maintain detailed notes regarding the sessions and also segregate billable vs. non-billable hours.
● Overbilling: Ensure your billers are using appropriate codes/modifiers to bill for services. Failing to accurately record provided services and translate them into codes with correct modifiers may result in overbilling. Hold internal audits to verify your agency’s procedural consistency.
● Contract misinterpretations: Confusing contract language in healthcare legal agreements can lead to differing interpretations. During contract disagreements, legal intermediaries may be the only viable solution.
Underpayments happen mainly for two reasons: practice mistakes and insurer mistakes. To prevent the former, you must have clearly defined standards that your staff consistently uphold.
Keep a clear record of sessions with all required details. Your therapists must know what items are integral to the session notes. Once the therapist has completed a note set, assess the notes to find the appropriate CPT codes. Ensure that your workers are familiar with CPT standards and what variables influence the usage of correct modifiers.
Review your contracts with insurers to clearly understand how much they have agreed to pay for each service. Finally, match the codes you have provided with the agreed-upon compensation amount.
You may need to contact an insurance agency to determine prices. Medicaid has online resources that makes this process simple. Unfortunately, many private insurers are less well equipped. Have knowledgeable contacts at these insurance companies to streamline the information-gathering process.
While most underpayments can be filed for reprocessing, practices rarely do so. Many health providers struggle to fix past errors while sending current bills. However, a well-trained billing team can recoup significant funds through either reprocessing or a quality appeal.
Insurers may describe why they provided less than the requested amount. In such cases, review their report to identify and handle the issue. Contact the insurance if they’ve failed to describe the underpayment reason and a further review shows an accurate claim.
Occasionally, insurers will refuse to fully compensate an appropriately priced claim. In this scenario, legal options may be necessary.
Using legal means to protect your finances is expensive and time-consuming. Plutus Health offers billing and coding services that protect your practice from underpayments. Our experienced team accurately codes and bills, then follows up on late payments. Contact us today to learn how we’ll improve your revenue cycle.
1. Understand the reasons underpayments commonly occur.
2. Maintain consistent billing and coding standards.
3. Contact insurers to gain agency-specific information.
4. File an underpayment claim once you’ve determined the underpayment was unwarranted.
5. Use legal aid when appropriate.
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