4 Revenue Cycle Startegies that Conquer Denials Management


Ensuring effective denial management continues to be the foremost concern for revenue cycle leaders, emphasizing the increasing demand for streamlined processes and vigilant oversight. Over the recent months, there has been a notable surge in challenges related to denials management, presenting a multifaceted and costly issue for revenue cycle leaders.

Seeking Cost-Effective Solutions? Explore the Option of Automating Your Denials Management Process

According to a survey conducted by AKASA, 78.7% of financial and revenue leaders emphasized that denials management demands the highest level of expertise. Interestingly, the survey also revealed that only 38% of hospitals and health systems have presently implemented automated denials management systems.

Considering the potential for inefficiencies and errors, adopting technologies like artificial intelligence or other advanced solutions holds the promise of significant time and cost savings for organizations, allowing them to optimize the utilization of their staff resources.

The Financial Impact of Denials Is Substantial

As per the 2023 Healthcare Revenue Cycle Management report, 40% of providers face annual losses exceeding half a million dollars due to claim denials, with 18% contending with losses surpassing a million. This underscores the persistent challenge of claim denials for providers, emphasizing the paramount importance of effective denials management for numerous revenue cycle leaders.

While some organizations have adopted technological solutions, the index also notes hesitancy among others, despite the clear advantages including enhanced efficiency, reduced errors, and expedited cash flow.

Algorithm Lands It a Lawsuit

Two members of a health insurance plan have initiated a class action lawsuit against the insurer, alleging improper denial of their claims due to the PXDX algorithm. It is claimed that this algorithm enables doctors to systematically reject payments in large batches, without the need to open or review patient files. This incident isn’t the first time PXDX has faced scrutiny. In March, it was reported that 300,000 payment requests were denied over a span of two months, with the algorithm taking a mere 1.2 seconds to review each case

Elevated Rates of Prior Authorization Denials for Medicaid Managed Care Enrollees

In 2019, a report from the Office of Inspector General revealed that Medicare managed care organizations (MCOs) rejected one in every eight prior authorization requests. The report underscores a notable deficiency in the oversight of denials across most states. Among the 115 MCOs scrutinized in the report, 12 exhibited a prior authorization denial rate exceeding 25%. Additionally, it was discovered that state Medicaid agencies did not review these rates, and many failed to gather and track relevant data.

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