The federal Medicare program processes millions of claims every year. Our team helps our clients deal with Medicare claims and billing issues, which has helped them become skilled advisors when it comes to Medicare claims.
Yes, Medicare denies some claims. The program has many billing rules and requirements, and it can be hard even for the program employees to know what’s right and wrong. Sometimes, this results in an accidental denial, and sometimes the denial is correct.
Knowing why Medicare might deny a claim can help give you a better chance of avoiding the issue altogether.
Medicare might deny a claim when there is:
A coding error
A Coordination of Benefits (COB) issue
A lack of proof of medical necessity
A non-covered service on the claim
Let’s talk about each of these reasons in more detail.
Medicare utilizes the Healthcare Common Procedure Coding System (HCPCS) to classify each medical procedure. If there's any discrepancy in the HCPCS code submitted by a medical professional's billing team, it might lead to Medicare rejecting the claim. One service frequently impacted by such coding mistakes is the "Welcome to Medicare" visit.
This visit, designed as a preventive service, is fully covered by Medicare within the first year of a beneficiary being enrolled in Part B. If, however, the submitted code describes a standard consultation rather than the specific wellness visit, Medicare may not cover the full cost, passing unexpected charges onto the patient. This situation is termed a procedural code discrepancy.
Additionally, errors related to diagnostic codes can also be grounds for claim denial. Medicare might only approve certain treatments or services based on the patient's specific diagnosis. When a medical procedure is correctly coded, but the associated diagnostic information is incorrect or missing, Medicare might not honor the claim. The incorrect or missing diagnostic codes issue is a predominant type of coding error, based on our observations with client claims.
Medicare's Coordination of Benefits (COB) division is responsible for overseeing claims when beneficiaries have additional insurance, like from an employer. This department establishes the hierarchy, determining which insurance acts as the primary payer and which serves as secondary. As an illustration, when an individual is covered by both a sizable employer's insurance and Medicare, the employer's insurance takes precedence as the primary payer, with Medicare following up as secondary. This sequence dictates how claims get settled.
It's important for employers to inform Medicare when a beneficiary forgoes the employer's insurance to make Medicare their primary coverage. Medicare then updates their records to reflect this change in primary payment responsibility. Nevertheless, there are instances where employers might neglect to share this change or miscommunicate the details.
Such lapses lead to COB-related complications, often noticeable when a retiree, now primarily under Medicare, visits a doctor. If Medicare's records still list it as a secondary payer, they may refuse the claim. Given the prevalence of this oversight, Medicare has established a dedicated line for rectifying COB discrepancies.
Medicare is diligent about only covering treatments or diagnostic tests that are deemed essential for addressing an illness or medical condition. It's not uncommon for doctors to conduct a myriad of tests, in a sort of exploratory manner, without a definitive reason. To counteract this tendency, Medicare necessitates that physicians demonstrate the medical urgency for every procedure or service rendered to beneficiaries.
Conversely, doctors, drawing from their professional judgment, might carry out services they believe are in the patient's best interest. However, disagreements can arise when Medicare evaluates the claim and perceives a lack of proven medical necessity, leading to a denial. One such frequently contested service is blood work.
Physicians, based on their experiences with non-Medicare insurance plans, often assume that routine blood tests will be covered. This assumption can lead to misconceptions when dealing with Medicare beneficiaries, as Medicare typically mandates a specific and valid reason for conducting blood tests. If this rationale isn't clearly communicated to Medicare, there's a high chance the claim will get rejected.
Additionally, blood tests conducted during the "Welcome to Medicare" visit aren't covered by Medicare. Sometimes, doctors overlook this stipulation and order such tests during this initial consultation. Such diagnostic blood tests are typically processed as standard claims, meaning beneficiaries are responsible for 20% of the expense unless they have supplementary insurance like Medigap. This can catch patients off guard, leading to unexpected bills landing on their doorsteps.
Certain services remain outside the purview of what Medicare typically covers. Common examples of these non-covered services include routine dental check-ups, hearing tests, and eye examinations. While Medicare won't cover these services as standard practices, exceptions are made when these services become essential for addressing a specific medical concern. For example, Medicare might approve a dental assessment if it's a prerequisite for an impending organ transplant.
Given that Medicare's coverage for such services is quite limited, it's advisable for beneficiaries to consider additional dental, vision, and hearing (DVH) insurance plans. At Local Medicare Specialists, we provide a dedicated DVH plan to bridge this coverage gap. It's also worth noting that several Medicare Advantage plans include dental, vision, and hearing benefits in their offerings.
When a medical professional suggests a service they believe Medicare might not cover, they're obligated to provide the patient with an Advanced Beneficiary Notice of Non-Coverage (ABN). This document serves as a formal notification that there's a possibility Medicare won't cover the recommended service. Furthermore, the ABN clarifies that should Medicare decline the claim, the patient acknowledges and agrees to bear the costs associated with the non-covered service.
Upon receiving an ABN, patients have the discretion to either consent by signing it and proceeding with the service or decline by not signing and opting out of the recommended service. It's important to note that the presentation of an ABN doesn't automatically imply Medicare won't foot the bill. Rather, it signifies the potential for non-coverage. Providers are exempt from furnishing an ABN for treatments that are universally excluded from Medicare coverage, such as elective cosmetic surgeries.
A common scenario where patients might encounter an ABN is before utilizing ambulance services. Medicare extends coverage for ambulance rides only under specific circumstances, when deemed medically imperative, and when certain criteria are satisfied. If an ambulance service provider assesses the situation and determines that not all requisite conditions are likely met, they'll present the patient with an ABN before commencing the ride.
Claims rejections can be challenging and frustrating to navigate. Rather than grappling with the intricacies of Medicare denials on your own, lean on our expert client service team for guidance. At Local Medicare Specialists, our seasoned team is adept at identifying the reasons behind Medicare claim denials. They can also aid in liaising with providers to resubmit claims when required. If a service should have been covered by Medicare, our dedicated team frequently succeeds in rectifying the situation, sparing our clients from the time-consuming and stressful process of identifying and solving the issue themselves. We prioritize bringing the relevant parties together, ensuring a smoother resolution for you.
Accessing our services comes at no extra cost. Reach out to us today to learn how to join the growing family of satisfied Local Medicare Specialists clients.
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We do not offer every plan available in your area. Any information we provide is limited to those plans we do offer in your area which are United Healthcare, Aetna, Humana, Cigna, Blue Cross Blue Shield of Arizona, Centene, Devoted, and Scan. Please contact Medicare.gov, 1-800-MEDICARE, or your local State Health Insurance Program to get information on all of your options.