It costs an average of $6.50 to file a claim, $25 to resubmit a rejected claim, and $37 to correct and resubmit a denied claim. These costs quickly eat into the average $88 reimbursement a therapist receives for each session. The more mistakes you make when filling out the CMS-1500 claim form, the more rejections and denials you’ll encounter. And the more rejections and denials you have to deal with, the lower your profit margin will be. And it doesn’t take a big mistake for a claim to be rejected or denied. 18% of all claims are denied for reasons that include ineligibility or incorrect submission.
Because most people tend to make similar mistakes, you can watch out for these errors and work to reduce their frequency. Let’s take a look at the most common CMS-1500 mistakes and how you can avoid them.
Before Filling the Form
You can prevent some denials by first verifying patient eligibility. Especially if you’re using telehealth, you’ll want to check to see if each client’s insurer still covers telehealth at this point. (Most insurers are covering telehealth in the first several months of the pandemic, but it’s uncertain whether this broad coverage will continue.) Of course, you can ensure that clients understand they’re responsible for any charges not covered by insurance. But you’ll be better able to maintain strong relationships with your clients if you don’t surprise them with the fact that they’re not eligible after you’ve begun working with them.
Second, you’ll want to make sure you’re using the most recent version of the CMS-1500 form. The form goes through regular updates, and using an outdated form can result in a rejection. You can get the most recent version of the form from your practice management software, your local office supply store, the U.S. government bookstore, and even Amazon.
Common Mistakes Therapists Make on the CMS-1500
Know that you’re not alone in finding it challenging to get everything right when you’re filling out a claim. Mistakes are common. But by understanding common mistakes and putting practices in place to prevent them, you’ll be able to reduce your number of rejections and denials. Let’s look at these common mistakes.
1. Service coding is inaccurate or not specific enough
It’s easy to forget to include applicable modifiers with your service codes. But you’ll want to make sure that your coding is as specific as possible. For example, if you’re providing the service via telehealth, you’ll need to use modifier 95. You’ll also need to include your license modifier. Besides risking a rejection or denial, using inaccurate CPT codes or leaving out modifiers may result in underbilling. You want to make sure you’re getting reimbursed for the services you provided!
2. Codes were misused
Even though you don’t intend it, misusing codes can appear as if you’re trying to commit fraud to increase reimbursement. There are two primary ways to misuse codes. The first is unbundling. This term refers to billing for two services separately when a single code is available that accurately describes the services. Upcoding, which describes using an inaccurate code with a higher reimbursement rate, is another problem. Upcoding often happens when a therapist spends significantly less time than normal in a session but uses a 45-minute service code.
3. The claim wasn’t filed on time
Even if you file a claim correctly, the payer may deny it if you didn’t submit it in the timeframe required. Some payers give you as much as a year to file a claim, but others insist on a 6-month or 90-day timeframe. To avoid running into problems with payers denying based on late filing, it’s a good idea to bill within 30 days.
4. Patient information isn’t accurate or is missing
Blue Cross Complete identified several fields related to patient information that are commonly listed incorrectly or are missing altogether. These include the patient’s name, sex, address, and relationship to the insured. Asking clients to update their information once a year, and reviewing each claim to ensure you’ve filled all the fields will help prevent this issue.
5. The ICD-10 code is missing or inaccurate
In fields A through L, you’ll need to record the highest-specificity ICD-10 codes that represent the “sign, symptom, complaint, or condition of the patient.” Mistakes often happen in these fields due to a missing or inaccurate ICD-10. For example, if you’re billing services for an adjustment disorder, you wouldn’t want to enter F43.2. You have several “child” options that you would need to decide between, including F43.21 — Adjustment disorder with depressed mood and F43.22 — Adjustment disorder with anxiety, among several others. If you use the general diagnosis category code, your claim will be denied.
6. Service provider information missing
Don’t forget to include your service provider information in the claim. Common omissions include leaving out the Service Provider NPI and taxonomy code. The NPI tells the payer who provided the service, and the taxonomy code communicates what kind of provider you are. You’ll also need to be sure to include your complete practice location address. And if you’re billing under a group of therapists, add your Practice tax ID and Practice NPI.
How a Practice Management Software Can Help You Avoid These Mistakes
Practice management software like TheraNest can help you avoid these mistakes in several ways. First, much of the process is automated, ensuring that standard information is correctly included. Your software should also suggest which CPT code to use for the service you’re billing. And if you file electronically, you won’t need to risk mistakes that come from manual processing.
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