We all know that the healthcare industry is arduous and complex to navigate. One of the challenging aspects of it is claim denials and the rejection codes used to deny the claims.
Even a tiny mistake in billing may lead to a rejected or denied claim, giving healthcare providers a shock down the spine; compelling them to act swiftly and address the complications.
A frustrating situation arises when the clearing house rejects a claim. The good news is a rejected claim is not a denied claim.
Clearinghouse Rejections Aren’t Denials
The healthcare providers have an opportunity to rectify the clearinghouse rejection codes and still get paid. Simply saying, the payor will approve the claim once it is error-free.
Wondering What Is a Clearinghouse Rejection?
Let’s tell you!
It is a term commonly used when the claims are rejected by a clearinghouse, which acts as a bridge between the healthcare provider and the payor. The reason for clearinghouse rejections may be due to multiple reasons:
- Missing details
- Duplicate claim submission
- Errors in patient or provider information
- Coding mistakes
- Inaccurate/missing documentation
From the perspective of doctors, physicians, and healthcare practitioners, a clearinghouse rejection may delay the reimbursement process for medical services delivered. Any rejection from a clearinghouse urges medical professionals and their staff to fix mistakes and resend the claims to the clearinghouse.
The Good News: As the claim is not denied and only rejected owing to a mistake, the payer will still reimburse for it after the error is fixed.
Clearinghouse Rejection Codes
Pesky clearinghouse rejection codes can be irksome. However, they ensure accuracy and that providers follow the medical billing regulations. These rejection codes keep the providers on their toes so that the claims are formatted correctly.
It also ensures they don’t miss any significant information before they’re forwarded to the insurers for payment collection.
Clearinghouse rejection codes are beneficial. They ensure your claims are error-free and assist you in creating flawless claim forms that aren’t denied by the insurer – declining the reimbursement.
Clearinghouses act as an intermediary between the insurance company and the healthcare provider, so they’re acquainted with all insurer submission guidelines.
8 Common Clearinghouse Rejection Codes During Claim Submission
Following are some of the common clearinghouse codes that can be troublesome for providers. Let’s discuss them in detail and how to fix them to bag complete revenue.
- Invalid Payer ID
- Invalid or Missing Service Code
- Invalid Date of Service
- Invalid Place of Service Code
- Invalid or Missing Procedure Code
- Invalid or Missing Diagnostic Code
- Invalid Patient Name & Address
- Invalid Patient Date of Birth & Gender
1. Invalid payer ID
This rejection means an error in mentioning the correct payor ID.
A clearinghouse’s job is to send medical claims to the relevant insurer using their ID represented by a unique identification number. However, when a healthcare professional includes an incorrect payor ID, the clearinghouse will not send it for reimbursement but rather reject it.
They’ll mention the rejection with a message like: Invalid Payor ID: Claim information not sent.
Based on the error, i.e., invalid payor ID, the clearinghouses reject the claim instantly and don’t send it for further processing. This clearly tells the healthcare provider or practice that their claim has an error and isn’t sent to the payor.
This sort of issue is commonly faced by large practices that have to submit claims to various insurance companies every day or deal with multiple payor IDs and insurance plans.
How to Fix It?
- Stay acquainted and use the latest payor ID code. Clearinghouses provide their clients with an up-to-date list to steer clear of such errors.
- Double check the payor information in your system to ensure such errors don’t occur.
- In case of confusion, call the number mentioned on the patient’s insurance card copy and confirm the payor ID.
2. Invalid or Missing Service Code
The rejection is due to missing or incorrect service code, i.e., CPT/HCPCS.
All insurance providers, such as Medicare, Medicaid, and private payors, use service codes. These codes, like CPT or HCPCS, determine the reimbursement for healthcare providers. The problem arises when they send a claim without an invalid service code. In this situation, the clearinghouse rejects the bill right away.
The reason is that without service codes, the insurance cannot determine which, how, or how many services were delivered. It hinders the payment calculation process.
So, clearinghouses send it back to the provider, without processing it further, to add proper service codes with a message like: Invalid or missing service code.
Invalid or missing code issues normally arise due to human error in large/multi-specialty practices. This error results in delayed payments and resubmissions.
How to Fix It?
- Stay up-to-date with the latest CPT and HCPCS codes. This helps providers save themselves from rejections based on invalid or missing service codes.
- Coders must cross-check and verify to ensure correct coding before submitting it to a clearinghouse.
- Update the recent code updates in the practice management systems and codebooks. It helps to ensure automated coding to avoid mistakes.
3. Invalid Date of Service
The rejection is due to an incorrect date of service or is outside the eligibility period.
The date of service refers to the day a medical service is delivered. To get reimbursement against a claim, the healthcare provider must provide the exact date a patient receives a service. So, when the claim doesn’t have a correct date of service, the clearinghouse rejects it and sends it back for correction.
The error message that accompanies the claim goes like: Incorrect/invalid date of service or The claim is rejected due to an incorrect date of service.
Here, the healthcare provider may have mentioned an incorrect date or a date of service that falls outside the eligibility period.
Large practices and hospitals where patients are delivered frequent services are more vulnerable to this rejection reason. Even a tiny mistake or formatting error may result in a claim being sent back.
How to Fix It?
- Healthcare providers must ensure correct date formatting, such as MM/DD/YYYY, to show the date of service rendered.
- Ensure that the date on which the service is provided falls within the eligibility period of the patient.
- Keep in mind the Medicare/Medicaid regulations regarding the date of service.
4. Invalid Place of Service Code
Mentioning the correct and valid Place of Service code is a must to ensure the claim is approved.
The Place of Service or POS code stands for the locations where the service was delivered. It could be a practice, clinic, hospital, or even via telehealth. So, on account of an incorrect POS, the clearinghouse rejects the claim.
When the healthcare provider submits a claim without or with an invalid POS code, the clearinghouse returns it with a message like: Invalid/incorrect POS code or the claim cannot be processed due to incorrect or missing POS code.
Healthcare providers who provide healthcare services in different settings, such as in-office or telehealth visits, must be careful when placing correct POS codes. Otherwise, their claims will not go through, and they’ll have to resubmit after correction, which means delayed reimbursements.
How to Fix It?
- To stay away from such errors, people responsible for documentation must mention the correct code that stands for the location where the service was provided.
- Staying up-to-date with the latest POS codes like telehealth or clinic settings is essential for claims to go through.
- Double check that the address and the ZIP code format are accurate on the CMS-1500 form and match the location where the service was provided.
5. Invalid or Missing Procedure Code
The claim is missing a procedure code or has an invalid one.
A claim must always have procedure codes described using CPT or HCPCS. These codes show other parties about the medical procedure used by the healthcare provider to deliver the required care. The exact procedure is represented using a procedure code or modifiers.
If a claim sent to a clearinghouse doesn’t have a correct or valid procedure code, it will be rejected. This is because they cannot track the treatment provided or the method used during the treatment procedure.
They’ll send the claim back without processing with a message like: Claim not processed due to invalid or missing procedure code.
Invalid or missing procedure codes affect the revenue collection for surgical centers and specialty practices like cardiology and orthopedics as they involve specific procedures that are billed in claims. Not mentioning the appropriate codes means no or delayed payments.
How to Fix It?
- Verify the procedure codes before mentioning them on the claim.
- Stay updated regarding coding updates like CPT from CPT codebooks, as it helps you avoid using outdated and incorrect codes.
- Use tools like EHRs to make sure the claim forms are free of errors and even the tiniest of ambiguities.
6. Invalid or Missing Diagnostic Code
Just like staying up-to-date with procedure codes like CPT is crucial, we recommend you stay current with ICD-10 or diagnostic codes and modifiers, too.
A little lapse in concentration or not knowing the correct diagnostic code results in a claim form getting rejected.
Diagnostic codes in a claim stand for the medical condition of the patient and the diagnosis to back the procedure chosen. Invalid or missing ICD-10 code means waiting for weeks and even months to get full reimbursement against your healthcare services.
If you’re not careful with diagnostic codes in the claim form, the clearing house will reject the bill with a message like: The claim is rejected due to an invalid or missing diagnostic code in the claim form.
Doctors and physicians dealing with specialized fields like cardiology and oncology must be very careful when it comes to mentioning the correct diagnostic codes. Wrong or missing code means late payments.
How to Fix It?
- Ensure that all your bills have the correct ICD-10 codes included.
- Taking help from EHRs and coding databases will help you eliminate such errors.
- Stay updated with the latest coding through coding resources so that you don’t include old or incorrect codes.
7. Invalid Patient Name and Address
Entering the correct name and address of the patient in the claim form is a must for claim form acceptance. Writing an incorrect name or mistaking it for someone else in the claim will mismatch the record of the clearinghouse and, eventually, the insurer.
Likewise, not mentioning the correct address or not changing it when the patient has moved to a new place means a grave error on the claim.
In case of an incorrect name or address, the clearinghouse will return the rejection with a statement like: The patient’s name is incorrect, so the claim cannot get through. Or the patient’s address doesn’t match the records.
Not mentioning the correct name could be due to human negligence. As far as the address is concerned, the patient might have changed the address without updating their insurance record.
Facilities like large hospitals or multi-specialty facilities that experience more footfall than others may face various claim rejections due to wrong name errors. Even a mistake of one character can lead to a clearinghouse rejection.
The same goes for addresses, as the clearinghouse or insurance record may have the old address of the patient, or the patient may have changed the locality without updating the insurance record.
Such claims will face rejections in reimbursements due to this confusion or technical error. Here again, practices and hospitals with a large patient base experience such issues.
How to Fix It?
- It is important to verify a patient’s name from the insurance card and address before the treatment.
- Ensure the patient’s name is spelled correctly. You can even confirm it from them. In regards to a change in address, ask them to update the new address with the insurance company.
- Take help from EHR to ensure no manual errors in name spelling and old addresses hurt your payments.
- Also, enter the correct phone number, ZIP code, city, and state name.
8. Invalid Patient Date of Birth & Gender
The date of birth or gender mentioned in the claim form don’t match the insurance records.
When filing for a claim, the provider may mistakenly enter the wrong date of birth or gender.
If such information as the DOB doesn’t match the record of the payor, the claim will be sent back, and the healthcare provider will have to go through it again.
Mentioning the correct gender for males and females in the claim for (CMS-1500) is essential, and not doing so is a grave mistake. Attention to detail and focus on work help you to avoid such mistakes and the consequences caused by these mistakes.
For instance, a slight mistake in mentioning the day, month, or date of birth can cause a straightaway rejection. The same goes for gender.
If the clearinghouse notices such a mistake, they’ll reject the claim and send it with a message like: Claim rejected due to invalid patient date or the gender mentioned doesn’t match the information provided to the insurance.
Birthdate errors are mostly experienced in pediatric and geriatric practices where age-specific treatments are provided. So, these practices face more rejections due to this error.
As far as mentioning the correct gender is concerned, a slight mistake in this regard can influence reimbursement for claims involving specific treatment procedures.
For instance, if a claim related to pregnancy has wrong gender information on it, the clearinghouse will not tolerate it and send it back for correction.
How to Fix It?
- Follow the correct 8-digit date format like MM/DD/YYYY while writing the birthdate.
- Verify the date from the patient and their insurance records.
- Maintain records in EHR systems.
- Mention the correct gender listed in the insurance records.
- Verify the information from the patient during intake.
- To avoid such errors, make use of the automated PMS systems.
Clearinghouses Ensure Error-Free Claims
Clearinghouses act as your first line of defense for error-free claims. Sending claims to clearinghouses before the insurance company is like proofreading a document for grammar and spelling mistakes. They have experienced professionals who pay close attention to detail and check for any discrepancies.
They’ll reject the claim if the claim has missing information, a coding error, a different modifier, or any mistake. It gives the providers a chance to rectify mistakes or fix the missing things in the claims before sending them to the insurance company. This helps the provider claim timely and complete payments instead of losing revenue.
Maximize Revenue and Minimize Errors with I-Med Claims
In the end, we’d like you to know that partnering with a clearinghouse and sending claims to prevent errors isn’t mandated by any law or regulation. Although they are invaluable in pointing out erroneous claims before forwarding them to respective insurance companies, you can avoid the issues yourself.
You can address most errors on the claims and stay safe from denials through careful coding and documentation. If you have an experienced team of coding, documentation, denial management, and auditing experts, you can save thousands of dollars by fixing the mistakes yourself.
If you’re still not sure and want a medical billing company that offers strong denial management services, I-Med Claims is your best choice. We have some of the best names in the industry handling your claims and ensuring they’re flawless before forwarding them to the insurance.
Our automated way of claim examination, along with manual processes, ensures that your claims are free from all sorts of errors. You can claim timely and complete reimbursements against services rendered.
We understand the reasons behind claim rejections and help you achieve maximum revenue by eliminating those errors and even processes that hinder your financial stability.
Partner with the I-Med Claims and discover how the best medical billing company helps to maximize your practice’s reimbursement revenue. For more details, contact us now.
