image of a medical professional looking at a piece of paper with a clipboard in the background

7 Ways to Prevent Medicaid Claim Denials

If you’re one of the 71% of U.S. providers who accept Medicaid, it’s essential you understand the billing complexities of these Government-run plans. Your practice revenue depends on it.

Medicaid provides health insurance coverage to 87 million low-income adults and children, and adults with disabilities. Like all insurance plans, Medicaid has quirks that can trip up physicians and billers. But because Medicaid plans are administered by individual states, the billing rules can vary depending on where your practice is located. 

Unfortunately, these unique billing rules can often lead to more denials. And although a strong denial management plan can help you recover revenue from denied Medicaid claims, avoiding them altogether is ideal. With that in mind, we’ve compiled some of the most common reasons Medicaid denies claims and how you can prevent them.

Common Medicaid Claim Denial Reasons And How to Fix Them

While some Medicaid claim denial reasons are similar to denials from private insurers, you may find some unique challenges when trying to get reimbursed by Medicaid. Here are some of the most common issues we look for when billing these types of claims.

1. Denial Reason: Patient Eligibility Issues

Whether dealing with government or commercial payers, eligibility issues are some of the most common reasons for claim denials. Eligibility problems could stem from lapsed coverage, which will likely increase as the government unwinds its Medicaid continuous enrollment provision launched during the COVID pandemic. 

Incorrect patient information, such as a typo in the date of birth or the wrong ID number, will also trigger an eligibility issue.

How to Prevent Patient Eligibility Issues in Medicaid

Create a process where your practice verifies insurance coverage before an appointment. Whether you do the check manually or with software, this step could save you time dealing with a denial and help you get paid faster.

2. Denial Reason: Coding Errors

While you may be familiar with the common procedural terminology (CPT) and Healthcare Common Procedure Coding System (HCPCS) codes your practice uses, Medicaid plans can have state-specific codes. 

You may also need to add Medicaid-specific modifiers to your CPT codes, which can vary by state. For example, each state Medicaid plan may customize “U” modifiers to fit their specific plan needs. Telehealth modifiers (such as 95 or GT) may also vary by state. 

How to Prevent Medicaid Coding Errors

Ensure you and your staff are familiar with any coding specifics for the Medicaid plans in your state. Note the differences from your commercial payers and identify which modifiers you need to use. Staying on top of these coding specifics will help you avoid claim denials. 

You may also consider employing billing and RCM automation software that can automatically edit claims or add modifiers based on specific criteria. Leaning on a billing vendor with certified professional coders (CPCs) can boost your claim acceptance rate.

3. Denial Reason: Prior Authorization Needed

Aside from unique codes or modifiers, each state Medicaid plan may also have different prior authorization (PA) requirements for treatments, tests or medications. Additionally, plans can have varied approval timeframes for PAs — the time between the PA approval and when you deliver services.

How to Prevent Medicaid Prior Authorization Issues

Like the coding and modifier variations, ensure you and your staff know state-specific PA requirements. Once you’ve determined the PA specifics, develop an internal workflow that will help streamline your PA process. Using a consistent workflow for PAs can help save time and avoid unnecessary delays with claim reimbursement.

4. Denial Reason: Medical Necessity

Medicaid plans are strict about only reimbursing claims for medically necessary care. And that medical necessity determination varies by state and plan. According to the National Association of Insurance Commissioners, medically necessary care includes services that:

  • Diagnose, treat, cure or relieve a health condition, illness, injury or disease. It only covers clinical trials outlined in the policy. 
  • Are necessary (and appropriate) to diagnose, treat, cure or relieve a health condition, illness, injury or disease.
  • Are within the generally accepted medical standards of the community.
  • Are not solely for the convenience of the insured, the insured’s family or the provider.

How to Prevent Medical Necessity Denials in Medicaid

You’ll see this as a consistent best practice: Ensure you and your staff know the details of your state’s Medicaid plan. Understand what the plan considers as medically necessary. Also, make sure you submit any required letters of medical necessity — these documents will help the Medicaid plan with its review and can help ensure your claim is accepted and paid.

5. Denial Reason: Coordination of Benefits

If you accept Medicaid insurance plans, you’ll likely find some patients with multiple insurance policies. The patient may have both Medicare and Medicaid — such as a patient over age 65 who also meets the income requirements for Medicaid. Others may have a commercial plan in addition to their Medicaid plan.

When a patient has two insurance plans, the plans will work together to make sure they’re not paying more than 100% of the bill total. They do this through a “coordination of benefits” or COB. The COB establishes which insurance plan is primary (and pays first) and which is secondary.

Medicaid will be the secondary insurance in all cases of multiple insurance plans. Medicaid is sometimes considered a “last resort” insurance, and you should only bill Medicaid plans once you’ve billed the primary insurance. If a patient has multiple plans and you bill Medicaid first, the Medicaid payer will deny the claim.

How to Prevent Coordination of Benefits Denials with Medicaid Plans

When verifying a patient’s insurance (ideally before an appointment), ask about any secondary insurance plans. When it’s time to file the claim, verify which plan is the primary and the secondary. In some cases, you may need to confirm this with the patient. Then, you’ll submit the claim to the primary insurance first. 

After the primary insurance processes the claim, note the allowable amount, patient responsibility and any adjustments. Then submit the claim to Medicaid, making sure to include the original claim amount, how much the primary insurance paid and why the primary insurance didn’t pay the entire claim. You can avoid a denial by including the remittance information and explanation of benefits (EOB).

6. Denial Reason: Unbundling of Services

Depending on the services you’re providing, Medicaid may require you to bundle those services under one code rather than billing separate codes for each service. If you bill certain services separately, Medicaid may deny the claims. 

For example, if you perform a tonsillectomy and adenoidectomy on a young patient, you would bill code 42820, “tonsillectomy and adenoidectomy on a patient under age 12.” This comprehensive code covers the entire surgery, pre-surgery checks, anesthesia and post-op care. You wouldn’t bill the surgery separately from the anesthesia or pre- and post-surgery care.

In mental health care, code 90792 is also a bundled or comprehensive code — it includes psychological assessment, history, recommendations, communication with family, ordering diagnostic studies and a medical status exam. Everything in the evaluation is covered in the one code and you shouldn’t bill the services separately.

How to Prevent Unbundling Denials in Medicaid

To avoid denials from unbundled claims, use comprehensive CPT/HCPCS codes whenever possible and review your claims to avoid overbilling. Familiarize yourself with the comprehensive codes used in your specialty. Remember that your individual state Medicaid plans may have different bundled coding rules, so staying up to date with those regulations is essential.

7. Denial Reason: Duplicate Claims

Both Medicaid and Medicare often issue denials due to duplicate claims. Duplicate claims are those with the same patient, treatment, date of service and provider.

How to Prevent Medicaid Denials from Duplicate Claims

Sometimes, a duplicate claim denial is straightforward — you accidentally submitted the same claim twice. This can sometimes happen if you handle billing and revenue cycle management (RCM) on your own — claims and payments can easily slip through the cracks and be difficult to monitor. 

But more often than not, there’s another error causing the duplicate claim denial. You can prevent these by:

  • Using modifiers. Modifiers can help you specify services on claims that may initially look the same. For example, if you perform a procedure on both the right and left sides of the body, add the appropriate modifier to each CPT/HCPCS code to indicate the side of the body rather than simply submitting the claim twice. 
  • Submitting multiple lines on the same claim. If you perform multiple services on the same date, submitting all the codes on the same claim can also avoid duplicate claim denials.
  • Avoiding resubmission without correcting the claim. If Medicaid denies a claim, don’t just resubmit it. Instead, look at the denial reason and make a correction or find additional documentation to help with your resubmission. Without any changes or other information, the payer may just see it as a duplicate claim.

Avoid Medicaid Claim Denials with the Right Workflows and Checks

With unique rules and regional requirements, navigating Medicaid claims can be challenging. Staying informed of plan changes, knowing your state-specific coding requirements, and having the right workflows and checks in place can make a big difference in your Medicaid denial rates. 

By proactively addressing these common Medicaid claim denial reasons, you can streamline your billing process and boost claim accuracy, ultimately saving you time and improving your insurance-based revenue. 

Tired of dealing with Medicaid denials? If you’re struggling to stay on top of the mountain of Medicaid claims, Gentem’s billing and RCM service can help. With in-house certified professional coders (CPCs) and automated billing software, you can offload your Medicaid claim filing and see higher reimbursement rates. Book a free demo today to see how Gentem will strengthen your practice’s financial footing. 

WATCH: Revenue Cycle Tips for Staying Independent

Many physicians are leaving private practice due to rising costs, lower reimbursement rates and staffing shortages. But staying independent is possible with a healthy revenue cycle.

Learn how to run a successful private practice with tips from this 20-minute webinar session.

eBook Cover for 5-Must Know Metrics To Build A Thriving Medical Practice

5 Must-Know Metrics To Build A Thriving Medical Practice

With this free guide, you’ll learn the key metrics that inform your practice’s financial performance and how best to optimize them to support practice growth.

Subscribe To Our Newsletter

Related Articles

Eliminate your medical billing headaches today.