he rise of digitization has fundamentally changed healthcare, increasing expectations for personalized and connected healthcare experiences. However, innovations in financial processes have been bogged down by legacy technologies and changing regulations significantly impacting claim denials and revenue management.
Consider the fact that claim denials by payers have doubled to 15 to 20 percent of total claims submitted, with 40% - 60% of denials having good potential for recovery. Learn how health providers take advantage of innovative strategies and processes to reduce claim denials and accelerate the revenue cycle.
Establishing a denial management strategy is critical in improving your practice’s cash flow and revenue generation. Here are the top strategies and best practices to help you manage claim denials.
1. Understand the top reasons claims are denied.
Before you navigate ways to reduce claim denials, it is crucial that you understand the denial patterns and how often they happen. Create a unique system to track the denials for say a duration of 3 months to identify the gaps. This information should include the denial amount, recovered amount, reason for denial, billing data and date of denial, the payer, and the ability to appeal, among other details.
Then, analyze all the data and identify the payers and reasons for denials, including the number of claim denials and the amount. When you have large volumes of data, you can focus your efforts on the highest denials and the dollar amounts.
2. Analyze the pros and cons of the existing claim submission process.
Once you get an analysis report, map out the existing claim denial process to identify the common patterns of flaws in the current process that are causing denials. As you walk through the process, ask the following questions: For instance
- Do you forget to add the documentation while submitting claims?
- Are you not using the correct CPT codes?
- What are the root causes of the current claim denials?
- What are the short-term and long-term strategies to prevent future occurrences?
3. Identify other issues related to denials
Besides denials, there are other possible reasons for lost reimbursements—inaccurate or incomplete billing, underpayments, over-payments, the difference in contract interpretation, etc. Harness the capabilities of charge-master assessment tools and concurrent charge integrity tools—to identify the gaps and navigate the right
strategies to improve reimbursements. You might have also failed to detect payment errors or include services in a claim. You need to watch out for these issues as part of your analysis.
4. Ensure accurate coding backed by strategic processes and technologies.
Healthcare coding compliance technologies help you detect errors and correct processes to mitigate claim denials. Contract compliance automation systems and robust coding systems help you stay on top of denial management—while providing actionable insights on submitting clean claims the first time.
5. Sustain focus on denials.
Regardless of all the process improvements, denials are bound to happen. It is crucial that you process these denials quickly—considering the deadlines and delayed payments that will have implications on your cash flow. When the opportunity strikes to appeal a denial, understand the processes of the specific payer and ensure that you send an appropriate letter with the right information to the right department within the stipulated deadlines. Ensure that you don’t lose your valuable time on appeals because you didn’t comply with the processes and instructions provided. Once the necessary groundwork is done, you can be fully sure that you are ready to appeal the claim.
6. Have a follow-up plan in place.
When you don’t receive a reply within 30 days, have a follow-up communication to ensure that the appeal was received. Document all the high-level details of the conversation including the person you interacted with and other relevant information. A subsequent denial means that you can try again. Ensure that you review the reason codes pertaining to the second denial—to validate and provide a fitting response.
7. Partner with a professional organization.
If claims are still getting denied and you believe the process is not justified, seek help of an independent organization. With payers that allow you to request an external review, this would be an ideal option to prevent claim denials at large.
8. Create a standardized workflow
A standardized process to resolve denials helps in minimizing unpaid claims. Cut back on time spent in performing redundant or duplicated tasks by setting up a denial management process that follows the classic lean management technique.
9. Maintain clear documentation
To ensure denials get resolved quickly it is important to build a case. Understand the insurers requirements for re-submission of claims. And have relevant accurate documentation to fight against denials. It is mission-critical to maintain pristine patient data to build an effective and resilient denial resolution process.
10. Utilize tools to quicken the appeals management process
Tools that help you look up insurer specific rules and guidelines and verify Local Coverage Determination (LCD) and National Coverage Determination (NCD) can save invaluable time. Appeal letter templates also help in executing an effective appeals management program. Increased focus on the appeals process lights the way for successful resolution.
A proactive approach to denial management is critical in determining the root causes of denials and efficiently address them.
While denial rates cannot fall to 0%, hospitals and practices realize huge benefits from being well-equipped with the right processes and innovation strategies that help recoup the dollars denied by payers—fostering financial sustainability of an organization in the long run.
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