The form says “Denied,” but why? – Hasso Hering


A perspective from Oregon’s mid-Willamette Valley

The form says “Denied,” but why?

Written August 10th, 2014 by Hasso Hering
They did the work, so why not pay them>

They did the work, so why not pay them>

Paperwork may not be the biggest reason for the high prices in medicine, but I wonder if cutting back on bureaucracy might not be of some use, at least a little.

Suppose your doctor, as part of your general wellness routine, wants you to have a routine blood test checking for this, that and the other thing. You get that done and as a layman you expect the lab to bill your insurance, the insurance to pay what it covers and you to get a bill for the rest. Instead, in this case, you get your monthly summary from the insurance company showing that of the claims for seven separate lab tests, ranging from $31 to $94 each and totaling $439, all of them were denied.

Denied why? Each separate denial has this note: “‘Not otherwise classified’ or ‘unlisted’ procedure code (CPT/HCPCS) was billed when there is a specific procedure code for this procedure/service.” It sounds like a hapless billing clerk typed in the wrong code, or maybe a machine somewhere went bonkers.

But the insurance company clearly recognized the particular tests involved (cholesterol, blood sugar, liver function, whatever). Otherwise it could not have determined that there’s a correct code for each one. So somebody might have called the lab’s billing department: “Hey, we have this bill from you guys and you used the wrong codes. How about emailing a corrected one so we can get this processed straight away?”

But no, instead the claims are denied, eight-page letters are put in the mail, including one to the insured, postage is paid, the billing department will eventually submit a corrected set of claims, and in due course, perhaps in months, it will get paid and the insured person will pay his share, whatever that turns out to be. At least I hope that’s how it works. After all, the work was done and the bill for it should be paid.

I’ve heard before about problems with the coding system used in medical billing. To the outsider, there has got to be a simpler way, or at least a quicker way to resolve denials based on apparently simple mistakes. (hh)

4 responses to “The form says “Denied,” but why?”

  1. Rolland Brower says:

    This sounds very familiar as 3 of the last 4 years for a routine exam Samaritan has sent the information to my carrier with the wrong coding. It was eventually corrected. This past time I learned a new thing, if you talk to the doctor about something not included in the coding for a routine exam you see a second coding and additional charge. It’s something that is now an accepted practice in the medical world. Seems to be the only way a patient can see a bill that doesn’t have surprises is to ask first “how does this get billed and what does my plan pay.” No one said modern medicine would be simple.

  2. Greg Burbach says:

    Yep, same thing happened to me last year. It took several calls to Corvallis Clinic to get them to send the right coding to the insurance co. About 3 months later, the lab tests were paid for in full by the insurance. Then, there is medicare and their bureaucracy. Don’t get me started on them. Oh boy!

  3. Bob Woods says:

    Which insurance company? If folks share information about problems, it might be easier to choose better insurance companies.

    I have Pacific Source. So far the only problem I have had with labs are some vitamin tests that my policy specifically excludes. That has not been enough for me to want to change over at this point.

  4. Marianne Vandenberg says:

    When my clerks order lab test into our system, we have to enter the ICD-9 codes along with each test. It’s supposed to identify those which Medicare won’t pay for. At that time we have to have the patient sign that they will pay for anything that Medicare doesn’t, or they have the choice of going back to the doctor to have the correct codes added, or we call and have the doctor fax a corrected form over (which can take hours either way and is MOST inconvenient for the patient!) We try to educate the patients to be proactive in their own best self-interest, by making sure that the correct codes (i.e. 272.0 for high cholesterol or v.58.69 for on-going use of a continuing medication) are on the orders before heading for the lab. Colossal pain in the derriere!


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