Denials within the realm of healthcare persist as a perpetual and escalating issue. By 2022, denials constituted over 11% of claims, posing a significant threat if left unaddressed, as they can severely compromise an institution’s financial well-being and prospects.
The combination of outdated technology and manual processes exacerbates the burden on staff, time, and finances when dealing with denied claims. Notably, unresolved denials can lead to an average loss of up to 5% of net patient revenue.
Moreover, denials remain a dynamic challenge due to evolving payer regulations, patient shifts between medical plans, and other external variables beyond an organization’s control.
To proactively tackle and manage denials, organizations should implement four essential steps.
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Understand the prevalent reasons behind denials
Denials can arise from various sources, often rooted in errors or oversights such as registration inaccuracies, issues with medical necessity, delayed submissions, lack of pre-authorizations, duplications, requested additional information from payers, or coding discrepancies.
Here’s what to do:
Dedicate time and resources to thoroughly scrutinize your denial data. Once you’ve gained insight into the prevalent denial types specific to your organization, prioritize areas that necessitate adjustments. Evaluate workflows with the most substantial impact and introduce technology solutions in critical domains.
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Enhance processes to proactively minimize rejections
Prevention remains the most effective strategy against denials. The revenue cycle’s procedures for confirming eligibility, securing prior authorizations, and meticulously tracking claims significantly influence downstream denial rates.
Here’s what you can do:
Scrutinize your workflows concerning eligibility verification, prior authorizations, and claim status monitoring. Delve into the policies of your primary payers concerning medical necessity. Proactively embed these criteria into your Electronic Health Record (EHR) system to address and adhere to these specifics.
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Create a denials process that is automated
Timely and thorough procedures are vital in effectively handling denials, and in the current landscape, this necessitates integration of automation.
Here’s what to do:
Utilize software solutions to ascertain suitable coverage. Harness predictive analytics to pinpoint denials with the highest potential for successful appeals. Implement specialized automation tools to streamline the prioritization of denials, optimize workflow routing, and even automate the creation and submission of appeals
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Monitor, document, and pinpoint the underlying reasons for denials
Continuously enhancing denial prevention and management hinges on meticulous tracking and comprehensive reporting, particularly in systematically documenting the causes behind denials.
Here’s what you can do:
Be attentive to all denials, whether received electronically or through direct communication with payers. Develop a systematic approach that captures and reports the underlying reasons for denials. Categorizing these reasons will facilitate monitoring denials based on type, frequency, financial impact, and payer source. Establish a dedicated team or task force to address denials and track emerging patterns.
By consistently following this process, you’ll uncover crucial opportunities to optimize the efficiency of your revenue cycle.
