Case Study: Eliminating $151,695 in Coding-Related Denials for a South Dakota Ophthalmology Practice

Ophthalmology billing requires precise coding, accurate modifier usage, and strict alignment with payer rules. A South Dakota ophthalmology practice was struggling with repeated coding errors, modifier issues, and NDC discrepancies, which led to growing AR backlogs and delayed payments.

Ophthalmology Practice Cuts Coding Denials by 83% and Reduces AR by $48,760 after partnering with MBW RCM, the practice corrected its coding workflows, reduced denials from 18% to 3%, and positioned itself to recover $110,000–$125,000 from previously denied claims.

Client Overview

Location: South Dakota, USA
Specialty: Ophthalmology Billing Services
Project Start Date: April 2025
Insurance AR at Onboarding: $428,922
AR >120 Days: $215,049 (50%)
Coding-Related Denials Identified: $151,695

Customer Situation

A South Dakota ophthalmology practice onboarded with MBW RCM in April 2025 with significant Accounts Receivable backlogs and high denial rates. The majority of denials were tied to coding errors, incorrect modifier usage, inaccurate diagnosis mapping, and NDC discrepancies for ophthalmic injection drugs.

At the time of onboarding, the practice reported the following:

• Total Outstanding Insurance AR: $428,922

• AR > 120 Days: $215,049 (50% of total AR)

• Coding-Related Denials Identified: $151,695

• High volume of denials related to E&M coding, diagnostic imaging, surgical procedures, and drug administration (NDC conflicts)

MBW RCM’s initial audit showed that coding failures contributed to 35% of total AR aging, causing payment delays ranging from 6 to 12 months.

Challenges

During the first 14 days of the AR review, MBW RCM identified several major coding-related denial categories affecting reimbursement:

Coding Denials and Financial Impact

Denial Category	Description	Dollar Value Impact
Modifier Errors	Missing RT/LT, incorrect 59/25 usage, misuse of 50 on unilateral tests	$61,320
Invalid Procedure/Diagnosis Pairing	CPT not supporting ICD-10 medical necessity, especially for imaging	$38,440
E/M Level Coding Errors	Missing complexity documentation, billing E/M in global period without 24 modifier	$21,890
Imaging Denials (OCT, VF, Fundus)	92133/92134, 92083, 92250 denied due to improper modifiers or unsupported medical necessity	$17,310
NDC/J-Code Issues for Injections	Incorrect units, missing NDC, JW/JZ issues	$12,735
Total Coding Denial Value		$151,695

Coding Issue Highlight: CPT 83861 (Corneal Pachymetry)

Multiple payers in South Dakota denied CPT 83861 due to:

• Invalid modifier

• Incorrect laterality

• Bundling when billed with certain E/M or procedure codes

• Missing medical necessity or unsupported ICD-10

Action Taken:
MBW RCM created a payer-specific billing matrix for CPT 83861 tailored to South Dakota payer rules and shared it with the billing team to ensure compliance.

Solution

MBW RCM implemented a detailed coding correction strategy and AR recovery plan to reduce denials and improve claim accuracy.

Comprehensive Coding Review & Corrections

• Reviewed every denied claim related to coding

• Validated clinical documentation, global period rules, and modifier accuracy

• Corrected invalid CPT/ICD-10 pairings

• Applied appropriate modifiers based on payer policies

• Addressed NDC discrepancies, JW/JZ usage, and injection billing errors

• Attached supporting clinical files including OCT printouts, VF reports, operative notes, and progression documentation

Appeals & Resubmissions

• Prepared detailed appeals with supportive documentation

• Resubmitted all corrected claims

• Implemented coding guidelines to prevent recurrence of the same errors

Process Workflow Enhancements

• Developed payer-specific coding references

• Created standardized workflows for imaging, E&M coding, and NDC compliance

• Educated internal teams on proper modifier hierarchy, diagnosis mapping, and global period rules

Results

After implementing the coding guidelines and completing AR recovery, the practice achieved significant financial and operational improvements.

Pre-Engagement Baseline (April 2025)

• Insurance AR: $428,922

• 120+ Days AR: $215,049 (~50%)

• Denial Rate: ~18%

• Rejection Rate: 7%

After Applying Coding Guidelines & AR Recovery

KPI Metric	Value Achieved	Analysis
Average Daily Charges	$10,202.06	Stable charge volume after correcting coding errors
Total Open AR	$380,162.02	$48,760 reduction despite ongoing claims
DSO (Days in AR)	32 Days	Excellent (Ophthalmology benchmark: 35–45 days)
Denial Rate	3%	Reduced from ~18%
Rejection Rate	1%	Improved from 7%
Average Net Collection Rate (NCR)	87%	Near benchmark (88–92%)
Average Gross Collection Rate (GCR)	48%	Increased due to cleaner claim submissions

Financial Recovery

• Successfully appealed and resubmitted: $151,695

• Expected collection recovery: $110,000–$125,000, depending on insurer payment rates

These improvements significantly strengthened the practice’s coding accuracy, reduced AR backlog, and accelerated cash flow performance.

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Coding errors, incorrect modifiers, and NDC discrepancies can create significant revenue loss for ophthalmology practices. MBW RCM helps identify and correct these issues at the root, reducing denials and improving reimbursement performance.

To learn how we can help your practice prevent coding-related denials and strengthen your revenue cycle, please fill out the form below and our team will reach out to you shortly.