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  • Writer's pictureEffy Healthcare

The Top 4 Ways to Avoid COVID-19 Claim Denials

COVID-19 claim denials are starting to make headlines. A recent survey by the New Jersey Hospital Association (NJHA) found that 30 acute care facilities received over 1,000 claims related to COVID-19 denied for dates of services between March and the end of June, totaling nearly $11.8 million.  According to an article in NJSpotlight concerning the study, one hospital received over 1,500 denials associated with testing – more than half were due to an invalid payment code; the others were due to lack of medical necessity after a patient tested negative for COVID-19. In terms of unpaid treatment claims, the NJHA survey found almost 20% involved lack of prior authorizations.

Providers both large and small are already feeling the financial strain of the pandemic. The American Hospital Association (AHA) estimated losses for hospitals and health systems at $50.7 billion per month between March 1 to June 30, 2020, due to decreased elective surgery revenue and increased costs for supplies and labor.* Primary care providers are expected to lose $15 billion during the crisis – which equates to $67,000 per full-time provider. For many healthcare organizations, a denied claim exacerbates an already tenuous revenue situation. Fortunately, there are strategies to avoid COVID-19 denials and keep revenue coming in.


Contrary to what many believe, COVID-19 testing and treatment are not covered under all circumstances. According to FAQS released by CMS about the Families First Coronavirus Response Act (the FFCRA) and Coronavirus Aid, Relief and Economic Security Act (the CARES Act), COVID-19 testing for general surveillance and employment will NOT be covered. What does this mean for providers and patients?

  1. Without medical necessity for testing, claims will be denied

  2. Testing to return to work is not covered


Tip #1: Educate staff to inform patients about denial scenarios

Open communication with your patients about testing and treatment coverage limitations will decrease the risk of surprise medical bills. Be sure that staff understands the difference between medically necessary testing and testing used for surveillance (when people want to know if they are positive and haven’t been knowingly exposed and are not exhibiting symptoms). Consider having patients sign an acknowledgment notice if they are requesting a test without medical necessity or for return-to-work purposes, so it is confirmed that they know their financial responsibility if or when the claim is denied.

Tip #2: Code for medical necessity

Claims must demonstrate medical necessity through coding. Be sure to confirm that the reasons for the visit, as well as presenting symptoms, are included in the claim. Communicating all the visit circumstances will make it more difficult for a payer to deny the claim if a COVID test returns negative.

Tip #3: Check patient benefits for treatment pre-authorization requirements  

Just as tests can be denied for lack of medical necessity, treatments can be as well. A plan’s pre-authorization requirements are still necessary for COVID-19 related services, procedures and medication. A diagnosis of COVID-19 will not change a payer’s requirements for pre-authorizations.

Tip #4: Use next-generation healthcare business assurance to prevent denials and preserve revenue

Create a birds-eye view of your revenue cycle with Healthcare Business Assurance. Unlike conventional systems that look retrospectively at performance, Healthcare Business Assurance continually monitors systems according to customized alerts so corrective action can be taken immediately. For example, an organization's business assurance system is set to alert when a coder fails to include medical necessity coding for a COVID test. The Business Assurance System continuously scrapes claims according to the customized parameters, and alerts that a claim has appeared in the system without the necessary coding. Management can take action to correct the claim (if appropriate) before it is submitted to the payer. If necessary, the coder can be educated about medical necessity, so the error does not happen again, and future denials are avoided.

Healthcare Business Assurance provides next-generation data analytics that can trigger alerts for virtually any RCM or clinical scenario across multiple, disparate systems. The main element that separates Healthcare Business Assurance systems from conventional data analytics is that it bridges the gap between operations and calls for action. This change in perspective allows revenue cycle teams to immediately investigate, diagnose and improve claims activities to prevent denials and increase revenue.

According to the MGMA, over 90% of denials are preventable– and COVID-19 insurance claim denials are no exception. By instituting our top tips, you can position your organization to avoid the costs associated with denial resolution and ensure reimbursement for the services you provide.


EFFY empowers hospitals, hospital systems and Integrated Delivery Networks (IDNs) to retrieve, review and compare massive amounts of operational, clinical and financial data across their total enterprise -- no matter the size, data incompatibility or platform complexity. Using customizable, exception-based triggers to identify deviations from norms, users can reduce errors and denials, improve efficiency and productivity, meet compliance requirements and ensure financial viability. Contact us today to learn how Effy Healthcare powered by RAID can help your organization.


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