Marcy Marquis, CRCP-P, maxRTE Client Services Manager
Denials have reached unprecedented levels for many hospitals and health systems, with commercial and public payers denying about 1 in every 7-10 claims submitted today. And yet only around one-half of denials are appealed, most likely due to the cost of reprocessing claims. As a result, most organizations focus their time and resources primarily on the high-dollar accounts. That means low-dollar accounts are often outsourced to a third-party vendor, reducing a hospital’s visibility to the causes behind their denials. Worse yet, some simply slip through the cracks altogether.
This blog examines drivers of costly denials and how to put the brakes on what’s taking an increasingly larger bite out of net patient revenue.
Major sources of denials and antidotes
- Duplicate Claims. A billing office employee may accidentally resubmit a claim before giving an insurance company enough time to respond, or resubmit a claim instead of following up on an existing instance.
- Antidote. A well-established workflow for submitting insurance claims and a practice management (PM) solution with claims tracking and reporting capabilities.
- Improper Coding or Issues with ICD-10. Errors arise as physicians and billing staff continue to become more familiar with the latest guidelines.
- Antidote. A modern PM solution with built in automated billing rules can flag potential coding issues before the claim is even submitted, helping to improve collections and reduce administrative costs. Clinical coding knowledge base notifies you of potential issues before the claim even leaves your system.
- Incorrect or Missing Patient Information. Many claim denials start at the front desk. Manual errors and patient data oversights such as missing or incorrect patient subscriber number, missing date of birth and insurance ineligibility can cause a claim to be denied.
- Antidote. An easy-to-use patient management system with built in eligibility checking streamlines the check-in process and reduces administrative mistakes, ensuring your claims goes out clean and your practice gets paid faster.
- Lack of Documentation to Support Necessity. In some cases, a claim may be denied if the payer is unsure of the medical necessity of the encounter or procedure. The payer may require additional documentation to support the level of service and determine medical necessity.
- Antidote. An integrated electronic health records and PM platform enables easy and efficient charting and quick access to documentation you need to support medical necessity and avoid claims denials.
- Increasingly complicated criteria: Payers are using more complex criteria for claim submission and medical necessity requirements, often applying their own requirements on top of CMS suggested criteria. Different payers require authorization for different types of procedures, or adjust policies without any notification to providers.
- Antidote. Assign specialists to work on claims within a particular care setting, so they become familiar with inpatient- or outpatient-specific clinical guidelines; segment clinical and technical denial specialists by payer, so they learn and keep up with their payer’s coding and varying requirements and build relationships with the payer’s team.
- Physician advisor help. In addition to appealing denials, your physician advisor(s) can help appeal denials, they can help with utilization management and review, providing preauthorization and documentation education to other physicians, and even identifying potential government audit risks. They can drive significant ROI through reduced denials and audits, lower costs of appeals, improved documentation and coding accuracy, and better utilization review—all of which can be tracked and measured.
- Standardized, segmented denial appeal process. Assigning denial appeal responsibilities to specialists can share make the effort more manageable. Technical denials specialists with associate’s degrees can handle medical record requests and non-clinical appeals. Clinical denials specialists (RNs) can handle retroactive authorization and clinical audits, and review Medicare, Medicaid, and managed care claims pre-billing. Physician advisors (MDs, Dos) can support the most complex cases, consult on clinical appeals, and write clinical appeal letters when needed.
- Solid training and tools. Denial prevention starts at the front desk, where the patient’s accurate primary and secondary insurance coverage should be captured. Yet employees handling insurance eligibility are not only checking for eligibility, but also gathering patient demographic information, providing pre-service instructions, answering questions, handling financial counseling, answering phone calls, and more on any given day. In addition to this overload, manual data entry contributes to the staggering fact that 23.9% of claims are denied due to eligibility and registration issues. Technology can help ease the front desk’s burden and eliminate inaccuracy due to human error.
- Proactive denial prevention through tracking, analytics. Tracking denials is critical to determine internal patterns, as well as those with specific payers. For example, if you have a payer that is consistently denying a claim, you can talk to your provider representative and show them your data on how frequently you are getting this denial. Tracking these issues will not only streamline your billing processes and increase reimbursement but will also help you identify where you need to focus your staff training. Technology is available to assist in tracking and providing insights that may be shared throughout the organization.
Despite the availability of technologies and tools to help manage business operations, 31% still use manual claims management processes. If you’re interested in learning how technology can help you reduce your denials, we’re here to help. Schedule your free demo of our maxDiscovery software at www.maxRTE.com