Improving Denial Management Process of Your Practice

Improving Denial Management Process of Your Practice

Denial Management is a key process of revenue cycle management. It is the process where every unpaid claim is investigated. It helps practices quickly and easily determine the causes of denials, know the future risks, and get paid faster. When practice deals with government and various private insurance carriers and that too for various billing scenarios, each denial is different. Key challenges faced in denial management are:

  • Increased patient responsibility: Due to the increase in high deductible health plans (HDHP) patient responsibility has increased to a great extent and hence pressure on practices to collect this amount.
  • Complex health plans: Most private insurance carriers have health plans with complex billing requirements, so practices are facing initial denials.
  • Value-based care: It’s no secret that value-based care affects the overall profitability of your practice. Certain service lines may not be profitable, which results in standardizing cost and payments; though value-based care has positive implications.
  • Outdated billing processes: Many practices still rely on outdated paper-based billing processes or databases that are developed in-house. This lacks automation and decision support to help optimize denial management.

Improving Denial Management

Depending upon the size of the practice, you might be submitting thousands of claims to insurance carriers. Your in-house staff might be spending numerous hours managing and solving the gaps in denied claims. These denied claims represent lost and delayed revenue to the practices. Some of the strategies overcoming challenges of denial management are:

  • Firstly, start tracking every submitted claim. It will help you to realize not every submitted claim is getting paid. Bifurcate claims into categories like paid claims, denied claims, rejected claims and claims to no payment status. It will help you to find out denied claim percentage. Ideally, it must be less than 5 percent of total submitted claims.
  • Secondly, separate denied claims. You can separate them payer-wise, denial reason, or patient-wise. As you classify them, you will start realizing a pattern in these denied claims. If you see a lot of denied claims for the specific insurance carrier, then look for billing guidelines. An insurance carrier might have specific billing guidelines which you might have missed. If you rectify that mistake and correct it, this will apply to all denied claims for that insurance carrier. If there is an issue with insurance coverage for a patient then the resolution of this problem will be applicable to all denied claims for that patient.
  • Thirdly, as you find a resolution to denial, correct the claim and resubmit it as early as possible. We will suggest that, even if you rectify the issue and found the resolution, you should talk to the insurance rep and ask for their assistance in this type of denial. Talking to the insurance rep confirms that you are on the right path. Never resubmit denied claims before talking to the insurance rep, cause, if it’s get denied again, the time required for claim payment will increase.
  • Lastly, note down resolutions worked against various denial reasons. This will act as standard guidelines to submit claims with corrected/additional information to avoid denials from occurring.

Practical Issues in Denial Management

A planned and strategic approach towards denial management will reduce your denial rate to less than 10 percent. But you will require an expert billing team who has the required expertise as well as can dedicate that amount of time. Some of the practical issues in denial management are as follows:

  • Time consuming process: Denial management and resolution is a time-consuming process. You have to track every submitted claim, sometimes you may not receive any response for the submitted claim over 30 days. In such cases, you have to call the insurance rep and get the payment details. Based upon payment details you have to classify claims into paid, unpaid, rejected, and denied claim categories. Further, you have to classify denied claims payer-wise, denial reason-wise, and patient-wise. All these things consume a lot of time.
  • Requires expertise: All denial management process mentioned above requires your team to have specific billing expertise, whether it’s talking to an insurance rep, the ability to read payment remarks (EOBs/ ERAs), taking payment update, or understanding every field of CMS-1500/ UB 04 form. Things may get a little difficult as billing guidelines change as per insurance carrier and medical specialty. It’s difficult to find and retain medical specialty-wise coders and billers.
  • It’s a costly process: It’s always advisable to submit a clean claim for the first time only. Cause if your claim gets denied, team members from various teams have to look into denied claims, find the root cause, work a resolution, talk to the insurance rep and do other activities. A study by the Medical Group Management Association found the cost to rework a denied claim is approximately $25.

There is a simpler solution for improving the denial management process of your practice. Outsource complete medical billing operations to a reliable billing company Medisys Data Solutions. Our cost-effective billing solutions will help you to reduce your denial management challenges. To know more about our complete revenue cycle management solutions, contact us at info@medisysdata.com / 302-261-9187

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