Shifting the Focus from Denial Management to Denial Prevention
Healthcare organizations lose billions of dollars to denied claims. It is estimated that as many as 65% of denied claims are never resubmitted. Over 80% of claims that are denied are on account of reasons that can be prevented, through adherence to policies and procedures, which the billing staff can be trained on. Managing denials requires an alarming amount of time, money, and resources.
The adage, “Prevention is better than cure”, does apply to Claim Denials as well. An effective denial prevention program requires an iterative process that includes identification of root cause, finding solutions to prevent the issue from recurring in the future, the institutionalization of these procedures through updates to standard operating procedures, and training the staff on these practices.
In this whitepaper from Medical Billing Wholesalers, we bring you a few steps that you can take to prevent denials:
1. Understand the magnitude of the problem
A successful denial prevention initiative is one that enables you to create a framework of iterative processes that can reduce the denial rate consistently. To create a framework for an efficient process one has to weigh the problem in hand. Here are three measures that can help you understand the magnitude of the problem:
Denial Rate
% of high dollar value claims that have been denied as a % of the total number of denied claims.
% of claims appealed
2. Categorize the root causes
Understand and categorize the root cause for each denied claim. This will help you see the issues at an aggregate level. Ensure that a multidisciplinary team sifts through the data periodically to identify a variety of root causes and put in place solutions for each of them. It can be surprising how the majority of denials stem from avoidable causes or actions.
3. Measuring the success of your denial management program
While measuring the success of a denial prevention program, it is crucial to measure the overall reduction in the denial rates and success of the appeals submitted. Although short term goals like claims resubmitted & win rates act as a good sign, the end goal is a considerable change in the denial rate.
4. Top Reasons for denial
The most common reasons for denials are listed below:
Incorrect coding
Timely filing issues
Out of network provider or physician has not been credentialed
Duplicate claims
5. Summary
A strong denial management program should help you drive sustainable improvement in revenue and help you shift your focus to preventing denials. A few elements of a denial prevention program are:
Analytics to identify the root cause
Recognize that most denials are preventable and caused by reasons such as
Coding Quality Ineffective rejections management processes
Create a Cross-Functional Team to address denials and make changes to prevent these denials
Take Inputs from Payers to update procedures
There is a lot of money that hospitals, physician practices, and even medical billing companies lose due to claim denials. At Medical Billing Wholesalers, we help our customers reduce denials by correcting issues in the front-end processes and work with front-end and coding teams to reduce these denials each month.
