DENIED. Six letters with big repercussions. Claim denials can be confusing, frustrating, and even a little heartbreaking. It’s resources you spent on providing excellent care that may not be reimbursed. And when your margins are already thin, that can really hurt your business.
Thankfully, there’s good news: You can prevent denials. If you understand what causes them, including all the rules you need to follow before you submit your claims, you’ll see those dreadful six letters much less frequently.
Every Step of Homecare Billing is Connected
The revenue cycle is the series of steps it takes to get a claim out the door and ultimately paid. Every step along the way has the potential to create a denial downstream.
Data flows through your revenue cycle from intake all the way through payment posting. When something goes wrong at step two, you might not notice it until step eight. The most successful agencies treat their revenue cycle as a continuous loop, constantly gathering intelligence from denials and feeding that information back upstream to fix the root cause—not just the symptoms.
Step 1: Get It Right at Intake
Intake is your first and best opportunity to prevent denials. When you onboard a new client you are collecting the foundation for every claim you will ever submit for that person. Missing or incorrect data from this process creates a ripple effect you will be chasing for months.
At intake, make sure you are capturing:
- Full demographic information (name, date of birth, gender)
- Medicaid ID and insurance member ID
- Payer information, including effective dates
- Which Medicaid programs the client is enrolled in, and the nuances of each (MCO, waiver, dual eligible status)
And it is not enough to just collect the data; you need to make sure it is the same across every system. Your agency management system, the payer’s system, any aggregator in the middle, and the clearinghouse all need to be in sync. If the data does not match, the claim will not go through.
Eligibility is especially important to verify, and to keep verifying. Clients age in and out of programs. They become dual eligible. Payers change. Key providers for the client may disenroll from insurance plans. An ongoing client may have their coverage shift at least once a year, sometimes more. That means eligibility checks cannot be a one-time event at intake; they need to happen on a regular basis throughout the life of service. If a payer changes and you don’t catch it, you could be providing weeks of care and billing the wrong payer before you get the denial that tips you off. By then, you are chasing authorizations retroactively, which is stressful, time-consuming, and financially risky.
Step 2: Watch Your Authorizations Closely
Once you have your authorization, the details matter more than most agencies realize. An authorization has a specific unit type, a unit count, a date range, and in many cases, approved days and times of service. Any mismatch between what the authorization says and what you scheduled or billed can result in a denial. And codes, unit types, and rates need to match your payer contract. If you don’t have a contract with a payer that authorizes service, get a single case agreement.
A few common authorization pitfalls:
Unit type mismatches. Your contract may specify quarter-hour units, but the authorization comes through for hourly units. If your billing does not align, you may not get paid, or you may run out of units.
Math errors. Authorization units are sometimes manually calculated by the payer. Double-check the math upfront. If the authorization provides 500 hours but the client needs 520 based on the approved schedule, you need to catch that before you run out of units mid-service period.
Off-schedule visits. If a client needs to reschedule a visit, you may need a formal authorization change before that new visit is billable. Not all payers require this, but some do, and getting denied because a visit was provided on an unauthorized day is entirely preventable.
Keep a close eye on authorization end dates and remaining units throughout the service period. Running out of units or going past the end date without a renewal is one of the most common causes of denials.
Step 3: Make EVV Compliance a Daily Habit
Electronic visit verification (EVV) is mandatory across the country, and compliance requirements are getting stricter. Your claims will be compared against EVV data either by the aggregator, the payer, or in the state database, and that data needs to be correct before your claim goes out.
The reality is that EVV exceptions happen—caregivers have phone trouble, connectivity issues occur in rural areas, clients refuse to allow telephony in their home. You cannot eliminate all of these, but you can manage them.
The agencies that stay compliant review their EVV exceptions every single day. They look at their dashboards, identify missing clock-ins/outs and schedule discrepancies, and resolve issues before they turn into a billing problem. They also track the caregivers generating the most exceptions—and work with them individually to improve compliance.
Why does this matter so much? Most states have a compliance threshold, many of which require 85 to 95% of visits submitted without edits. That threshold exists as a cushion for the exceptions you cannot avoid. If you are already burning through that cushion because of preventable issues, you are at risk of falling out of compliance, which can ultimately cost you payer contracts.
Step 4: Post Payments and Read What They Tell You
Payment posting is where intelligence lives, and it is one of the most overlooked steps in the revenue cycle.
When you post payments against your claims in your system, you can see exactly what was paid, what was short-paid, and what was denied. That comparison is enormously valuable. It tells you whether you are billing at the correct rate, have an out-of-network code mismatch, have eligibility issues showing up as non-member denials, or if you went over your authorized units.
An aging report run from your system after payment posting gives you a clear picture of all open claims and how long they have been sitting. Combine that with your denial analysis, and you can identify patterns: Is a particular payer consistently denying a specific code? Is there a systemic authorization data mismatch? Payers will often work with you on these systemic issues as they want clean claims too.
The Biggest Shift: Stop Playing Catch-Up
The agencies that collect 99% of their revenue are not doing anything magical. They are disciplined and review their processes constantly. They catch problems at intake instead of at denial. They post payments and actually analyze them. They look at EVV exceptions every morning instead of every billing cycle.
If you want a deeper look at the full revenue cycle and what it takes to run a high-performing billing operation, HHAeXchange offers educational resources, webinars, and tools built specifically to help agencies catch these issues before they become denials. You can also learn more about outsourcing your billing with our Revenue Cycle Management Services.
