Health Information Management

Outpatient coding, billing errors continue to lead to majority of automated denials

APCs Insider, December 18, 2015

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By Steven Andrews

Outpatient coding and billing errors lead to more than half of all automated denials by Recovery Auditors, according to the latest RACTrac survey from the American Hospital Association (AHA).
The survey of more than 2,500 hospitals, conducted during the third quarter 2015, found that 40% of automated denials were the result of outpatient billing errors, while 20% were due to outpatient coding errors. This is up 10% for the combined results from the third quarter 2014 survey.
However, for complex denials, 76% of hospitals nationally report incorrect MS-DRGs or other coding errors as the top reason for denials. Incorrect APCs or other outpatient coding and billing errors only lead to 4% of complex denials.
Nationwide, the average dollar amount of automated denials is up sharply from last year at this time, with hospitals reporting each at $1,056 in 2015, compared to $688 in 2014. The average dollar amount for complex denials has fallen from $5,618 in 2014 to $5,458 in the most recent survey.
The rate of hospitals with denials reversed during the discussion period has also fallen, from 52% in 2014 to 45% in 2015, along with the number of denials available for appeal, from 540,203 to 366,479 over the same time period. Claims overturned in favor of the provider after completing the claims process have also fallen from 70% last year to 62% in 2015.
For complete results of the survey, as well as an archive of previous surveys and the opportunity to sign up for future surveys, see the AHA’s RACTrac site.
Note: APCs Insider will not publish the weeks of December 25 and January 1 due to the holidays, so look for the next edition Friday, January 8. Thank you for being a loyal reader of APCs Insider and have a safe and happy holiday season!

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