Don’t just fix a denial. Fix its cause.

Reducing Denials Medical BillingAs mentioned in a previous blog, denials are a huge problem for hospitals and physician practices. A 2017 analysis by Change Healthcare revealed for the typical health system as much as 3.3% of net patient revenue, or $4.9 million per hospital is at risk due to denials. The report further stated that even though an average of 63% of those claims is recoverable, that effort came with a price tag of roughly $118 per claim.

That’s why preventing denials in the first place is key.  Here are some steps your organization can take to reduce the cost of denials:

  1. Automate the pre-eligibility and prior-authorization process. When a patient makes an appointment, verify their insurance, patient demographic information, and eligibility. Do it again 2 days before the appointment, and again when the person checks in to the practice.
  2. Use an advanced claim scrubber. Make sure that data fields are complete and codes are current and correct. Diagnosis codes and authorization numbers must match the level of care billed. A claim scrubber stays current on clean claim rules and can make sure all of this is complete.
  3. Know the reason. When you receive a denial, make sure you code the denial for your own internal purposes, so that you can track the reason it was denied by the health plan.
  4. Analyze the trends. Track the number and cost of denials. Work the most expensive denials first. Identify persistent issues and resolve them.
  5. Create a strategy. It’s important for your practice or healthcare organization to have a strategy in place for eliminating high-cost denials. Take steps to eliminate the causes of denials in the first place. Develop a culture of accountability among personnel.
  6. Mind the deadlines. Touch each denial within 24 hours, and respond to every denial within 7 days. If the claim isn’t submitted to the insurer within the permitted time, it is almost always rejected.
  7. Monitor and track your success. Optimally, denials should be less than 1% of all of your claims.

To assist with these steps, consider a medical billing service such as Quanum Revenue Cycle Management (RCM) to assist with every aspect of the revenue cycle, ensuring accurate and timely billing, and improving reimbursement rates.

For more information on reducing denials, watch the webinar, “Improve your bottom line by reducing claim denials,” featuring Mark Anderson, CEO of AC Group and healthcare IT futurist. Mark will break down the complexities of denial management and provide useful steps to reduce the risk of denials.


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