Life-Cycle of a Dental Claim
Understanding the Life Cycle of a Dental Claim
In the world of dental practice management, efficient revenue cycle management (RCM) is essential for maintaining financial health and optimizing cash flow. At the heart of RCM lies the life cycle of a dental claim, a process that encompasses several key stages from claim creation to reimbursement. Understanding each stage and implementing best practices can streamline operations, minimize errors, and maximize revenue collection. In this blog post, we'll go into the various stages of the dental claim life cycle and provide insights into best practices for efficient management.
Claim Creation and Batching
The journey of a dental claim begins with its creation, typically after procedures are performed and documented in the practice management software. Some offices prefer batching claims right after the patients visit or at the end of the day, where all procedures for the day are grouped together and submitted collectively. Whether claims are batched after each visit or at the end of the day, consistency and timeliness are crucial to maintaining a healthy revenue cycle.
Pro Tip #1: Whether you batch your claims throughout the day or all at once, the final step in sending claims to the clearinghouse is recommended to do ALL at once with applicable attachments and narratives to save your office staff time.
Pro Tip #2: It is recommended that all healthcare providers, including dentists and hygienists, review their day sheets before submitting claims to the clearinghouse. The day sheet should contain a list of all the procedures completed for each patient on that day. This helps prevent sending incorrect information to insurance companies, such as procedures that were not performed or missing procedures that were added to the visit on that day. It is essential to ensure that all procedures are accurately reflected on the ledger before submitting the claim to the clearinghouse.
Claim Submission - Clearinghouse
Once claims are created, they are submitted through a clearinghouse—a crucial intermediary between dental practices and insurance payers. Clearinghouses ensure claims are transmitted accurately to the respective insurance companies using unique payer IDs. Attention to detail is paramount here, with emphasis on using the most up-to-date ADA claim forms and accurate procedural codes to prevent claim rejections.
Pro Tip: Most payers have not updated their systems to accept the new 2024 ADA claim form (click the link) and are still accepting older versions at this time.
Key Functions of Dental Clearinghouses:
Flags Validation Errors: Clearinghouses identify errors in claims, such as incorrect codes or patient information, and flag them for correction before submission.
Flags Rejected Claims: Rejected claims, due to reasons like invalid coverage, are marked by clearinghouses, allowing prompt action by dental teams to rectify issues.
Corrects Claim Information: Clearinghouses enable quick corrections to claims without the need for recreation, speeding up the submission process and reducing administrative burden.
Prompts Attachments: Some procedures require supporting documentation. Clearinghouses prompt practices to attach necessary documents, reducing payment delays due to missing information.
Comparison of a Dental Clearinghouses:
DentalXchange (ClaimConnect/EDI-Health Group, Inc):
Charges $0.25 per claim and $25 for unlimited claim attachments.
Validation errors can be corrected on the web portal, but attachments are not real-time.
Claim resubmission may cause duplication of charges.
Additional services include eligibility checks and ERAs for a monthly fee.
Dentrix (eClaims):
Charges $0.40 per claim submission.
Attachments may experience occasional issues.
Additional charges for claim resubmission without receiving attachments.
Patterson (Change Healthcare):
Charges $0.45 per claim submission.
Integrates with NEA FastAttach for attachments.
Attachments may drop occasionally.
Vyne Trellis (Formerly Remote Lite):
Offers unlimited claims and attachments for $99 per practice location.
Provides comprehensive services, including ERAs and claim research.
Real-time eligibility verification is included.
A list of more clearinghouses: clearinghouses.org/clearinghouse-directory/
Insurance Carrier Processing and Payment
After submission, the insurance carrier reviews and processes the claim. Payment is then issued through various means, including virtual credit card (VCC), paper check, or electronic funds transfer (EFT). Providers have the flexibility to choose their preferred payment method, ensuring convenience and efficiency.
Dental Virtual Credit Cards (VCC): These are printed on sheets of paper with the explanation of benefits (EOB) provided by the insurance company. The insurance company will show an image of a “credit card” with a CC number, expiration date, and dollar amount reflected on the claim being paid.
Pro Tip: VCCs are usually accompanied by a merchant fee, so depending on what is the best fit for your office, some offices will opt in for EFTs or continue to receive paper checks.
Dental Paper Check: Despite advancements in electronic claims processing, many insurance companies still issue reimbursements via paper checks. Dental practices must be equipped to process and deposit these checks promptly to ensure consistent cash flow. Paper checks offer flexibility for dental providers, allowing them to choose how and when to deposit funds. Unlike electronic payments that are subject to processing times and potential delays, paper checks provide tangible control over cash management. Paper checks generate physical records that serve as an audit trail for financial transactions. These tangible documents are valuable for accounting purposes, providing a clear record of payments received and deposited. Despite the digital transformation of healthcare and dental practice management, paper checks remain a relevant and necessary component of revenue cycle management.
Pro Tip: Embracing a hybrid approach that combines electronic and traditional payment methods empowers dental practices to meet the diverse needs of patients and navigate the complexities of modern revenue cycle management effectively.
Dental Electronic Funds Transfer(EFT): EFT offers a seamless and efficient alternative to traditional paper-based payment methods, enabling secure and expedited transfer of funds between insurance companies and dental providers. By leveraging EFT, dental practices can streamline payment processing, reduce administrative burden, and accelerate cash flow, ultimately enhancing overall financial efficiency and performance. Additionally, EFT promotes greater transparency and accuracy in financial transactions, mitigating the risks associated with manual payment processing errors and delays. With its numerous benefits, EFT has emerged as a vital component of the digital transformation reshaping the dental industry's financial landscape.
Pro Tip: EFT is best utilized for insurance companies where you have the most patients and the payors that have a user-friendly online portal. This makes an efficient, streamlined process for the majority of your insurance payments and will usually be made through a BULK payment. It is recommended to keep the miscellaneous payers as a paper check or (VCC) as it is easier to track for those few patients.
Posting Insurance Payments
Upon receiving payment, it must be accurately recorded in the practice management software. Posting insurance payments reconciles the claim and updates the patient's ledger accordingly. This step is crucial for maintaining accurate financial records and tracking revenue. Posting insurance payments not only records revenue but also updates patient ledgers, reflecting any outstanding balances accurately. This step ensures alignment between recorded payments and actual bank deposits, reducing discrepancies and maintaining financial integrity. Additionally, posting payments removes claims from the outstanding aging report, streamlining administrative tasks.
Pro Tip #1: Post payments by procedures so that the claim payment is allocated exactly as it shows on the EOB. This ensures correct collections for each service provider, you know exactly what was paid for each procedure, enables proper adjustments that should be made, and makes it easier to understand should questions arise in the future.
Pro Tip #2: The EOB should reflect the patient's ledger fees 100% accurately, making any adjustments necessary per the insurance contract and notating the patient portion for each visit in the claims note section making it easy to tell if the patient has an accurate balance or not based on what the patient paid on the original date of service.
No-Pay Claims
When it comes to managing dental claims, one of the most frustrating scenarios for dental practices is encountering "no-pay claims." These are claims that are submitted to insurance companies but are either denied or not paid for various reasons. No-pay claims can significantly impact a practice's cash flow and revenue cycle, leading to administrative burden and potential financial strain. Addressing and resolving these claims promptly is crucial for maintaining financial stability and maximizing reimbursement. There are several common reasons why claims may result in no payment.
Incorrect or Incomplete Information: Claims may be denied due to errors in patient information, procedure codes, or insurance details. It's essential to double-check all claim submissions for accuracy and completeness before sending them to insurance companies.
Lack of Preauthorization: Some dental procedures require preauthorization from insurance companies before they can be performed. Claims for services that were not preauthorized may be denied, leading to a no-pay situation. Verifying preauthorization requirements and obtaining approval beforehand can prevent this issue.
Policy Limitations or Exclusions: Insurance policies may have limitations or exclusions for certain procedures or treatments. Claims for services that are not covered under a patient's policy may be denied, resulting in no payment. It's essential to verify patients' insurance coverage and communicate any potential out-of-pocket costs upfront. Examples: Age limitations, frequency, waiting period, missing tooth clause, replacement clause, and non-covered service.
Coding Errors: Incorrect coding of dental procedures is a common reason for claim denials. Using the correct procedure codes and ensuring they accurately reflect the services provided is essential for successful claim submission. Regular training and education for dental staff on coding guidelines can help reduce coding errors.
Timely Filing Limitations: Insurance companies often impose deadlines for submitting claims, known as timely filing limits. Claims submitted after the specified deadline may be denied, resulting in no payment. It's crucial to monitor and adhere to timely filing requirements to avoid claim denials.
To address and resolve no-pay claims effectively, dental practices should have processes in place for claims management:
Follow-Up: Promptly follow up on denied or unpaid claims to identify the reason for the denial and take appropriate action. This may involve resubmitting corrected claims, appealing denials, or contacting insurance companies for clarification.
Documentation and Communication: Maintain detailed records of all claim submissions, denials, and communications with insurance companies. Clear and concise communication with insurance representatives can help expedite claim resolution.
Revenue Cycle Analysis: Regularly analyze revenue cycle metrics, such as claim denial rates and aging reports, to identify trends and areas for improvement. Adjust billing practices and workflows accordingly to minimize future claim denials and optimize reimbursement.
Appealing Claims
Appealing denied claims is a critical aspect of revenue cycle management for dental practices. When a claim is denied by an insurance company, it's not necessarily the end of the road. Dental practices have the option to appeal these denials, with the goal of overturning the decision and securing reimbursement for the services provided. There are some key steps and strategies for effectively appealing denied claims.
Review the Denial: Carefully review the denial notice provided by the insurance company to understand the reason for the denial. Common reasons for appeals would be downgrades, alternative benefits, timely filing, medical necessity, any incorrect denials.
Gather Supporting Documentation: Collect all relevant documentation related to the claim, including treatment notes, diagnostic reports, preauthorization documentation (if applicable), and any correspondence with the insurance company. Comprehensive documentation strengthens your appeal and provides evidence to support the medical necessity of the services rendered.
Understand the Appeal Process: Familiarize yourself with the insurance company's appeal process, including deadlines for submission and required documentation. Some insurance companies have specific forms or procedures for appeals, so ensure compliance with their requirements.
Prepare a Detailed Appeal Letter: Draft a clear and concise appeal letter outlining the reasons why the claim should be reconsidered and providing supporting evidence. Clearly explain any corrected coding errors, address any policy limitations or exclusions, and highlight the medical necessity of the services provided. Make sure to mention the possible reporting of the insurance company to the insurance commissioner in the appeal if you feel like the claim is being unjustly denied.
Follow-Up: Submit the appeal letter and supporting documentation to the insurance company within the specified timeframe. Keep track of the appeal submission date and follow up with the insurance company regularly to inquire about the status of the appeal.
Escalate if Necessary: If the initial appeal is denied, consider escalating the appeal to a higher level within the insurance company. This may involve requesting a peer-to-peer review or engaging in additional discussions with claims representatives or supervisors as well as possibly reporting to the insurance commissioner of your state if you feel the decision is unfair.
Consider External Assistance: In some cases, it may be beneficial to seek assistance from a professional billing company or consultant like Elite Dental Systems with expertise in appeals management. Experts can provide guidance on the appeal process, help strengthen your case, and increase the likelihood of a successful outcome. For a consultation, give us a call at 916.269.9899 or email contact@elitedentalservices.net.
Track Outcomes and Learn: Keep detailed records of the appeal process, including outcomes and any lessons learned. Analyze trends in claim denials and appeals to identify areas for improvement in billing practices, documentation, or communication with insurance companies.
Patient Billing for Remaining Balance
In cases where the insurance payment does not cover the full cost of treatment, patients are billed for the remaining balance. Effective communication and transparency regarding financial responsibilities empower patients to fulfill their obligations promptly. Patient billing for remaining balances is a crucial step in the dental revenue cycle management process. After insurance payments have been applied, any remaining balance owed by the patient must be communicated clearly and collected efficiently. There are some key considerations and best practices for patient billing.
Clear Communication: Transparent communication with patients about their financial responsibilities is essential. Clearly explain any out-of-pocket costs, deductibles, copayments, or coinsurance amounts upfront, preferably before treatment begins.
Detailed Statements: Provide patients with detailed billing statements that itemize the services rendered, insurance payments applied, and any remaining balance owed.
Pro Tip: Attach the original EOB to the first statement for clear communication as to why the patient has the balance, and scan what is sent to the patient into their chart for future reference. Remember: the dental practice is just the middleman. The practice should not feel obligated to discount or make any balance adjustments, as this would go against the agreement you have with your patient's insurance and is considered insurance fraud.
Multiple Payment Options: Offer patients various payment options to accommodate their preferences and financial circumstances. Accepting cash, checks, credit cards, care credit, cherry and online payments through secure portals provides flexibility and convenience for patients.
Payment Plans: Consider offering payment plans for patients who may have difficulty paying their entire balance upfront. Structured payment plans allow patients to spread out the cost of treatment over time, making it more manageable.
Follow-Up: Follow up with patients promptly after insurance payments have been applied to remind them of any remaining balances and encourage payment. This should be done every 30 days for 90 days. Send reminders via email, text message, or phone call to prompt action and minimize overdue accounts.
Compassionate Approach: Approach patient billing with empathy and understanding. Financial concerns can be stressful for patients, so be sensitive to their needs and circumstances.
Consistent Policies: Establish consistent billing policies and procedures across your practice to ensure fairness and efficiency. Clearly outline your payment terms, late fees, and collections policies in writing, and communicate them to patients upfront.
Follow Legal and Regulatory Guidelines: Adhere to all legal and regulatory guidelines related to patient billing and collections, including HIPAA regulations and fair debt collection practices. Protect patient privacy and rights throughout the billing process.
Monitor Accounts Receivable: Regularly monitor accounts receivable aging reports to track outstanding patient balances and identify overdue accounts. Implement processes for following up on overdue payments and escalating collection efforts as needed. Regular monitoring of key performance indicators (KPIs) related to the revenue cycle provides valuable insights into practice performance. Analyzing metrics such as claim rejection rates, aging of accounts receivable, and collections efficiency enables informed decision-making and continuous improvement.
In conclusion, mastering the life cycle of a dental claim is pivotal for successful revenue cycle management in dental practices. Navigating the life cycle of dental claims requires diligence, attention to detail, and a proactive approach to revenue cycle management. By implementing best practices at each stage—from claim creation to reimbursement—practices can streamline operations, enhance financial performance, and ultimately deliver better patient care. By understanding each stage of the process and implementing best practices, dental practices can optimize revenue collection, improve cash flow, and enhance financial performance in an ever-evolving healthcare landscape. Stay tuned for more insights and tips on optimizing revenue cycle management in our blog series.
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