Claim denials are one of the most common expenses that healthcare organizations face on a frequent basis. While they are impossible to eradicate, most organizations are dealing with a large number of claim denials which takes an unnecessary amount of time and energy.

The way most healthcare organizations deal with claim denials today is considered inefficient and needs a plan to improve the process. When attempting to tackle the problem of inefficient claims denial management, there are four areas you to focus your attention on:

1. Payer Rules

The first thing you should look at when trying to improve your claim denials process is how to prevent a denial. This data can be hard to retrieve from payers because in many cases, the data shows how often they are rejecting claims. By allocating claims denial data, they can prevent customers from passing them over due to an unappealing claims denial rate.

Another thing that makes this part difficult is the fact that payers use different processes for denying claims and then communicating the claims denial information differently when presenting it to providers. These two situations give an overview of why claim denials are so hard to prevent, but thankfully there is a solution.

If providers want to decipher the denial rate of a practice that is reluctant to give away too much information, they can use a simple calculation. Take the total amount of claims denied by that practice in a dollar amount within a fixed period, and divide it by the dollar amount of all the claims that were submitted within that same period of time. The resulting number will put you in the ballpark for estimating their claims denial rates. Having a minimal claims denial rate will signal that the practice in question has a healthy revenue cycle.

2. Automating Claims Denial Process

Most organizations are still using a manual process for working out their claim denials. Using a manual process means your employees have to try to keep up with all the different diagnostic codes and insurance policies that are in play. These codes and policies require extensive amounts of research to stay “in the know” and are prone to error.

Using a manual method could be considered outdated and can be remedied by instituting an automated claim denials program that leverages software and algorithms to help speed up the process. These automated services can help organizations identify errors before they become a problem and will help weed out issues with claims that wouldn’t have been caught otherwise.
When choosing to automate your claim denials management process, you can either:

– Build an in-house system—this option is time-consuming and potentially less efficient.
– Use a third party company. Going to a third party like Med-Strategies is the better option as their employees have years of experience and know exactly what to do and how to do it when it comes to improving your claim denials management system.

3. 90% of Claim Denials that Occur are Preventable

Most claims that are denied are entirely preventable. The most common reasons for a claim denial are as follows:

– Missing Information
– Duplicate Claims
– Already Adjudicated Services
– Services Not Able to be Covered
– Missed Deadline for Submission

Providers should refuse to accept any late claim submissions, and make sure their front-end staff is working with billing teams to help prevent claim denials as well.

4. Appealing Denials Costs Providers Time and Money

While appealing a denial may appear to be an opportunity to recover lost revenue, often times the appeals process ends up taking more than it gives back. Many practices spend more than they receive on appealing denials and the amount of time and effort your employees have to put into would be better served in preventing denials in the first place.

Claim denials are an unavoidable part of running a healthcare organization, but with the proper strategy and technology in place, you can avoid them nearly every time. You can keep your claim denial rates near zero by automating your claim denials management process, cutting out costly appeals, setting clear rules. Doing these things means you will have much more time, energy, and money for your organization.

Using a Revenue Cycle Management Company such as Med-Strategies, Inc. can help eliminate the issues that are associated with denial claims management. Med-Strategies partners with their clients to resolve these issues through technology and operational efficiency resulting in enhanced revenue performance.