Eight Costly Insurance Mistakes (And How to Fix Them)

With advances in AI now, an insurance carrier can deny your claim in three seconds. And it might take somebody in your office an hour on the phone to fix it.

That math is not an accident, it’s by design. And it is the reason that small mistakes cost so much more than they used to. Insurance companies have automated the denial. Nobody has automated the appeal. And I don’t think anyone ever will. Could you imagine insurance companies agreeing to something that make them pay faster? We can dream though can’t we?

As the Director of Operations for Smile Care Claims, I run billing operations for dental practices. That means I spend my days inside other people’s claims, aging reports, and practice management software, and I get to see exactly what has been going on in there.

It also gives me a unique position to isolate the key mistakes many offices make with the insurance filing and follow up process.

And what I find is it’s rarely one catastrophic thing (sure, sometimes it is). But normally there are four or five small problems that run almost unnoticed for years. You lose a little here, you get denied or downcoded there and so on. The problem: this all adds up and before you know it, your accounts receivable is a mess, and you’ve lost or written off tens of thousands of dollars!

It might be a member ID typed wrong. A crown submitted without the pre-op x-ray that would have supported it. An incomplete narrative. Each one is thirty seconds of inattention that turns into a denial, a downgrade, or a month of delay. Multiplied across every claim you file, all year.

And with that said, here are eight costly insurance mistakes I see most often, and every one of them is something your office can fix, this month.

Table of Contents

• 1. Patient information entered wrong
• 2. Virtual credit cards
• 3. Not taking the preoperative x-ray
• 4. Weak or missing narratives
• 5. Verifying against the wrong fee schedule
• 6. Calling an “eligibility check” a verification
• 7. Fee schedules and codes that quietly go stale
• 8. Submitted is not paid
• The pattern
• Bio

1. Patient information entered wrong

The most common and the most expensive, and also the least interesting, which is probably why it persists.

A member ID typed wrong. An old address nobody updated. The wrong relationship to subscriber. A date of birth off by a digit. None of it feels like a big deal at the front desk.

Here is what it costs. A clean claim generally pays in three to ten days. A claim with bad patient information gets rejected, comes back, has to be corrected, and gets refiled. Now you are looking at twenty-eight to thirty-five days for the same money. That is a month of cash flow gone, on a claim that was correct in every clinical respect, because of…a typo.

And if nobody is watching the clock, some of those will age past the payer’s timely filing deadline while they bounce around. At that point the claim is not late. It’s gone.

The solution: Build a verification step into registration for every new patient and anyone whose coverage has changed. It takes thirty seconds and it could be the highest return thirty seconds in your practice.

2. Virtual credit cards

I bring this up with almost every new practice we work with, and I still do not understand why so many offices accept them.

When a payer sends a virtual credit card instead of an electronic funds transfer, you run it like any other card. Which means you pay a merchant processing fee, which may be anywhere from two to three percent or more, to collect money you already earned.

Now, imagine you get one of these from a PPO where you’re doing your normal $1,400 crown for $950. Insurance pays $475 and you’re writing off an additional 3% or $14.25 by using the VCC. It adds insult to injury! And while that $14.25 isn’t much, multiply that by the 200 crowns (or procedures of similar cost) you may do in a year. That’s $2,850! Now, we’re talking real money. That’s a salary. Or half your rent! Whatever. You shouldn’t have to pay it. And the kicker? You don’t.

According to guidance from the Centers for Medicare and Medicaid Services (CMS), the federal agency that sets the rules for how health plans pay providers electronically, the only fee that can apply to a standard EFT payment is the small charge from your own bank. They put the average at about thirty-four cents.

Thirty-four cents versus two to three percent. On money that was already reduced by your contracted discount.

CMS guidance states plainly that a health plan cannot require a provider to accept virtual credit card payments, and that a provider has the right to request the standard electronic funds transfer instead. If you make that request, the plan has to comply. That comes from the HIPAA administrative simplification rules, and CMS restated it in guidance issued in March 2022.

The solution: Call your highest volume payers, tell them you are opting out of virtual cards, and enroll in EFT with each one. You have to do it plan by plan. If a payer will not comply, CMS accepts complaints.

One warning. Opting out may not stick permanently. Check your remittances periodically and be ready to do it again.

3. Not taking the preoperative x-ray

When I ask offices about this, I hear the same thing constantly. “We took one six months ago.”

Now we have two things here. Clinically the doc the authority and he or she may have a pre-op from months ago and may not feel an x-ray is justified medically. Fine. That’s his or her call. And on top of this, the insurance may not pay for it.

Again, that’s the clinical side and the doctor’s call.

Now, let’s look at the insurance side for a minute. In my opinion, insurance companies are looking for any way humanly (or inhumanly) possible to deny your claim. And if you want to get paid, they want the image that supports the procedure you just did. Depending on the procedure, there’s a heck of a good chance they are going to ask for a pre-op X-ray. And if it does not exist, you cannot go back in time and create it. The claim goes out without support, gets denied, and now you are appealing something you could have prevented with thirty seconds and a sensor.

The solution: Nobody is using film anymore. It is digital, it is less radiation than the patient is getting from the phone in their pocket, and it does not have to cost the patient or the payer anything. If insurance won’t pay for it, don’t charge for it. Just take it. Wouldn’t you rather write off that $35 for a PA if you had to, than explain to a patient why their insurance won’t pay for their crowns?

4. Weak or missing narratives

Most offices do not write narratives. They paste in a line or two from the clinical notes and call it documented.
That is not going to get you paid on anything that needs justifying. Perio, some crowns, scaling and root planing, anything with a frequency or medical necessity question attached.

The solution: The clinical note is written for you and for the chart. The narrative is written for a claims reviewer who has never met the patient and is looking for a reason to say no. Those are two different documents with two different audiences. If you only write one of them, you will lose claims you should have won.

5. Verifying against the wrong fee schedule

This one is subtle and it catches even the sharp offices that are really on top of insurance.

You are contracted directly with a carrier, so you assume that is the schedule you are being paid on. But that patient’s specific plan sits under a leased network umbrella, and that is the schedule that actually applies. You verified accurately, against the wrong contract.

You find out when the adjustments start showing up bigger than expected. Then everyone is annoyed about the adjustments, when the problem actually happened weeks earlier at verification.

The solution: When you verify, confirm which fee schedule the plan pays on, not just that the patient is covered.

6. Calling an “eligibility check” a verification

Confirming a patient has active coverage tells you almost nothing useful.

Coverage is not a yes or a no. It is a yes with a waiting period. A yes twice a year. A yes if the last one was long enough ago. A yes unless there is a downgrade provision, in which case it is a yes at a lower number than you were expecting.

Replacement clauses catch people constantly. Most plans put a window on crowns, bridges, and dentures, and it varies by plan, so you have to check the specific one. If you do not ask when the existing work was done, you can complete the case and get denied outright because the plan will not cover another one yet. That is free dentistry, and there is no going back to the patient afterward to collect for it.

The solution: Decide what verified means in your office, write it down, and stop letting it get shortened to an eligibility date when the schedule gets busy.

7. Fee schedules and codes that quietly go stale

Two versions of the same problem, and both are invisible.

If the fee schedules in your practice management software are not current, you are either billing below your contracted rate, which leaves money on every claim, or you are creating mismatches that slow payment down while the payer’s system sorts it out. Nothing flags it. It just costs you a little, forever.

The solution: Audit your fee schedules against your contracts at least once a year, and whenever a contract changes. Go through the CDT updates as a team rather than sending around a memo nobody opens.

CDT codes change every year. Codes get retired, revised, and added. Billing a retired code is an automatic rejection, which at least announces itself. The quieter and more expensive version is not knowing a new code exists and continuing to bill a procedure the old way, when there is now a more accurate and better reimbursed way to describe it.

8. Submitted is not paid

The last one is not really a mistake. It’s lack of a system.

A lot of offices have no system for what happens after a claim goes out. It gets submitted, and then it either turns into money or it does not, and nobody is watching which. Denials sit. Underpayments sit. Claims the payer never actually received sit, and everyone assumes they are just slow.

By the time it surfaces on an aging report, some of it is outside the appeal window and all of it is harder to work than it would have been at thirty days.
And when it does surface, the instinct is to adjust it off and move on. Do not, at least not before someone looks.

The solution: Plenty of denials and most downgrades are appealable with the right documentation. The write-off should be the decision you make after you check, not instead of checking.

The pattern

You’ll notice that none of these are dramatic. And in my mind, that is exactly what makes them expensive. If they were huge problems, they would be noticed and resolved right away. But they’re not So they just fester and cost your office money. A lot of money over time.

My suggestion? Pick the two that sound most like your office and fix those first. You will see it in your aging report within a quarter.

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Bio

Sandy Samarco is Director of Operations at Smile Care Claims. An MGE-trained office manager, she spent fifteen years running a practice that grew from $550,000 to $4.5 million, then two years running a multi-unit specialty group where collections rose 19% in her first year and 11% in her second. She now oversees insurance billing, verification, and A/R recovery for dental practices across the country.