Discover a detailed guide to avoiding therapy claim denials by addressing common CPT code errors. This article provides actionable strategies for ensuring accurate claims, reducing errors, and maintaining seamless reimbursement processes.
Dealing with claim denials is a struggle no therapy practice wants to face, but it’s a reality for many. Whether you’re providing physical therapy, occupational therapy, or speech-language services, coding errors can lead to costly denials that impact your practice’s bottom line. These denials not only cause delays in reimbursement but also create financial strain, disrupting the day-to-day operations of your clinic.
The financial impact can be significant, leading to lost revenue, increased administrative workload, and sometimes even strained relationships with patients. That’s why it’s crucial to minimize claim denials by avoiding common CPT code mistakes. With the right approach to coding and documentation, you can reduce denials and improve the financial health of your practice.
In this article, we’ll explore some of the most frequently denied CPT codes and offer actionable tips to help you prevent coding errors, keep your revenue flowing, and maintain a thriving practice.
Why Understanding CPT Code Denials is Critical
The reality of claim denials due to coding errors can’t be overstated—each denial represents more than just an administrative hiccup. For many therapy practices, it translates to delayed payments, lost revenue, and an increased burden on already stretched administrative resources. When denials pile up, the financial health of the practice is put at risk, as staff must spend valuable time correcting claims and resubmitting them, often waiting weeks or months for reimbursement.
Accurate and timely reimbursement is the lifeblood of any therapy practice. When claims are denied, cash flow is disrupted, making it difficult to manage operational costs like staff salaries, equipment, and facility maintenance. Worse still, it can affect your ability to provide consistent care to patients, especially when financial pressures force you to limit services or adjust priorities.
Getting reimbursed correctly the first time should be a priority for every practice. Understanding the root causes of claim denials, especially those related to CPT coding mistakes, helps streamline your billing process and ensures that payments come in without unnecessary delays. By staying on top of coding requirements and payer guidelines, you can prevent denials and keep your practice financially stable.
Top Reasons for Denials and How to Avoid Them
Over time, I’ve noticed a pattern in why certain claims are denied, and these denials can feel like a major setback. However, understanding the root causes of these denials and taking proactive steps can make all the difference. Here are some of the most common reasons for CPT code denials and what you can do to avoid them:
1. Medical Necessity Denials
Reason: One of the most frustrating reasons for a denial is when insurance companies challenge the necessity of a treatment. Even when I know the therapy is essential for my patient’s recovery, insurers may not always agree.
Actionable Tip: The key to avoiding these denials is strong clinical justification. I’ve found that thoroughly explaining how the treatment directly ties to the patient’s condition is crucial. Include specific treatment goals and how the therapy plays a role in achieving those outcomes. For example, if using ultrasound therapy (97035), make sure to document why it is essential for the patient’s progress and how it improves their condition.
2. Inadequate Documentation
Reason: Claims can also be denied due to insufficient or unclear documentation. This has been a common issue, and it usually happens when the records don’t fully back up the therapy provided.
Actionable Tip: To avoid this pitfall, it’s critical to make sure all documentation is both detailed and specific. Include progress notes, measurable goals, and clear treatment plans. I’ve learned that the more specific and organized the documentation, the fewer issues I face with denials. Make sure every session is linked to functional outcomes and demonstrates progress.
3. Duplication of Services
Reason: Sometimes, the denial comes from coding two services that seem redundant. For instance, I’ve noticed that billing for self-care training (97535) can get tricky if other therapeutic activities are also coded, leading to claims being flagged for duplication.
Actionable Tip: Before submitting, I always double-check my codes to make sure there’s no overlap between services. For codes like self-care training and therapeutic exercises, it’s important to clearly distinguish each service and its unique value in the treatment plan. A well-documented plan ensures you’re not caught in this overlap.
4. Frequency Limitations
Reason: Codes like re-evaluations (97164) often get denied if they are billed too frequently. This happens especially when re-evaluations are not properly justified in the treatment notes.
Actionable Tip: Each insurance provider has its own guidelines for how often a service can be billed. Being aware of these payer-specific limits has helped me reduce denials. For re-evaluations, I always ensure that I’m showing a clear need for reassessment, supported by updated goals or changes in the patient’s progress.
If you address these common reasons for denials head-on, you can take control of your billing and minimize disruptions to your practice’s revenue flow.
How to Improve Documentation and Justify CPT Codes
One thing I’ve learned from experience is that solid documentation can be the difference between a claim approval and a denial. The level of detail and clarity you provide can make or break the case for medical necessity. Here’s how I approach documentation to avoid denials and keep the practice running smoothly.
Step-by-Step Guide to Proper Documentation:
1. Include Clear Medical History and Treatment Rationale
When documenting, I make sure to include the patient’s full medical history and explain in detail why a specific therapy is necessary. It’s important to show the connection between the patient’s condition and the therapy being provided. For instance, if I’m billing for ultrasound therapy (97035), I ensure that the notes detail why this modality is vital for treating the patient’s specific injury. Is it reducing inflammation? Promoting tissue healing? Insurers need to see that justification.
2. Link to Functional Outcomes
In my notes, I always link the therapy directly to measurable functional outcomes. It’s not enough to say, “patient is improving.” I provide specific metrics to show how therapy is positively impacts the patient’s ability to function or their quality of life. For example, if the therapy has helped a patient regain range of motion in a joint, I note the specific degrees of improvement and how it translates into functional benefits like walking or lifting objects.
3. Track Progress and Justify Re-Evaluations
Tracking progress over time is essential, especially when it comes to re-evaluations (97164). Re-evaluations often get flagged for being unnecessary, so I ensure that every re-evaluation I perform is backed by clear evidence of progress—or lack thereof—and a need to update the treatment plan. By showing how the patient has responded to previous treatments and why a new approach is required, I can justify the need for continued care.
Practical Example:
Let’s take 97035 (ultrasound therapy) as an example. Early in my career, I experienced multiple denials for this service, which was frustrating. I later realized that the issue wasn’t the therapy itself, but my lack of proper justification. I wasn’t adequately explaining how ultrasound was necessary for that specific patient’s recovery.
Once I started documenting the clinical rationale—such as showing how ultrasound reduced swelling in a post-operative knee patient or aided in healing soft tissue injuries—the denials decreased. The key was showing insurers how ultrasound contributed to achieving functional outcomes, like improving mobility or reducing pain.
When I took these steps, I observed that only did not improve my documentation but also ensured I am providing enough evidence to justify your CPT codes. This approach has saved me from many denials, and I believe it can help you too.
Practical Coding Tips to Prevent Denials:
Finding the right CPT codes can feel like a daunting task, especially when it comes to avoiding denials. However, there are a few strategies that have proven to be helpful in reducing errors and increasing the chances of your claims getting approved the first time.
• Use the Most Specific Codes Possible
One of the key things I’ve learned is that specificity matters. When you use vague codes like 97039 (Unlisted Modality), you’re setting yourself up for potential denials. Insurance companies don’t like ambiguity. So, whenever possible, choose a code that clearly reflects the treatment provided. If an unlisted code is unavoidable, make sure the documentation explains exactly why the code was necessary and how the service was delivered. Clear, detailed documentation can make a big difference in the approval process.
• Verify Insurance Policies for Certain Treatments
Before offering treatments like shockwave therapy (0101T) or laser therapy (S8948), which are often deemed experimental by insurance companies, I’ve found it essential to double-check whether these treatments are covered under the patient’s insurance plan. It’s tempting to assume that everything is covered, but skipping this step could lead to time-consuming denials later. A quick call to the insurance provider to verify coverage can save a lot of headaches down the road.
• Stay Updated on Payer Guidelines
One of the most challenging parts of coding is that payer guidelines aren’t static—they frequently change. A therapy or treatment that was accepted one month might suddenly be flagged for denial the next. Staying on top of these changes is crucial for minimizing mistakes. I’ve made it a habit to regularly check with payers about their medical necessity guidelines and CPT code updates. It’s a simple step, but it’s saved me from coding errors and denials more than once.
Since then, I have always kept these tips in mind and integrate them into my everyday practice. I realized that I have significantly reduced the likelihood of claim denials and had a smoother flow operating my therapy practice.
Avoiding Denials for Emerging or Specialized Therapies
Billing for emerging or specialized therapies presents unique challenges, as these treatments often fall under the umbrella of “investigational” services. Treatments like ultrasound therapy or low-level laser therapy, though beneficial to the patient, can sometimes be flagged by insurance companies as experimental, leading to denials. However, there are steps you can take to avoid this.
How to Bill for "Investigational" Services:
In my experience, thorough clinical documentation is key when billing for services that might be considered investigational. I’ve learned to ensure that every detail of the treatment rationale is clearly documented. This means explaining why the therapy is essential, based on the patient’s specific condition, and backing it up with clinical evidence whenever possible. For example, if I’m using ultrasound therapy (97035), I make sure to tie it directly to the patient’s condition and outline how this therapy will contribute to measurable progress.
Additionally, it helps to include information about prior treatments that may not have been effective, thus supporting the necessity of trying an alternative or emerging therapy. This makes it clear that the treatment isn’t a random choice but a well-considered option for the patient’s recovery.
Engage with Insurance Providers:
Communicating directly with insurance providers is another crucial step. I’ve found that pre-authorization is one of the best ways to prevent denials for specialized therapies. When I anticipate a treatment might raise questions—whether it’s ultrasound therapy or something more specialized like shockwave therapy—obtaining pre-approval before administering the treatment helps avoid surprises later. This process may take extra time upfront, but it’s far better than dealing with a denial after the fact.
Building a relationship with insurance companies and making sure I’m aware of their policies for investigational services has also helped. The more transparent I am with them, the better the chances of a smooth billing process, which, in turn, keeps the practice’s revenue flow steady.
I found that documenting my evaluations thoroughly and engaging directly with insurers reduce the likelihood of denials for these specialized treatments. We just sometimes have to anticipate or do something extra to increase the likelihood of getting our claims approved and come up with a tailored plan for patients to receive the care they need without unnecessary delays.
Conclusion:
Avoiding common CPT coding mistakes is essential for reducing denials and safeguarding your practice’s revenue. The frustration of dealing with claim rejections can be overwhelming, but by staying attentive to how you document treatments, justify medical necessity, and keep up with payer guidelines, you can prevent unnecessary denials.
The financial health of a practice depends on getting paid on time and in full for the services provided, so maintaining thorough, accurate documentation is not just a matter of compliance—it’s a way to keep your practice thriving.
To make this process smoother, I encourage you to be proactive in your approach. Review your billing codes regularly, ensure that your documentation supports the services you provide, and keep an open line of communication with insurance companies. These efforts can significantly reduce denials and keep your cash flow steady.
If you’re ready to take your coding efforts to the next level, consider using a downloadable checklist that helps you implement these best practices. With a few adjustments, you can protect your practice from revenue loss and focus more on delivering quality care to your patients.
Ready to reduce therapy claim denials and streamline your billing process? Schedule a demo with HelloNote EMR today and discover how our system can help you ensure accurate coding, improve documentation, and boost your revenue!