Is Manual Claims Denial Management Your Weakest Link?

If You’re Not in the Lead, You’re Falling Behind.

A survey conducted in July of last year found that less than half of providers are using commercial automated claims denial management systems. Considering that denials are on the rise, any organization that isn’t actively working on this issue is jeopardizing their bottom line. In fact, as value-based-care (VBC) payment models begin to replace fee-for-service (FFS) models, many organizations find that the best solution for the near term is to run solutions for both payment models concurrently.

Manual is a Thing of the Past.

Considering how complex and vital claims denial management is to an organization’s financial health, the really surprising statistic is that nearly a third of provider organizations are running no automated solutions at all. Another 18% are running in-house solutions, of which some are excellent but others are old, inflexible, and lock the organization into nonstandard solutions that negatively impact data sharing, data analysis, and regional collaboration.

Can you Afford to Wait any Longer?

If your organization is one of the stragglers, you may be paying a lot more than you think for your indecision. Due to the complexity of the current payment environment and the labor costs of manually managing denials in-house, you may be facing multiple challenges in the form of inefficient denial resolutions, difficulty transitioning to emerging value-based care payment models, and slow or incomplete revenue capture. And while the market is in transition from FFS to VBC, this change will take long enough that not focusing on capturing maximum revenue from the current FFS environment may result in significant revenue being permanently lost.

So what are the most preferred solutions?

  • The greatest benefit of commercial systems (and the best in-house solutions) is their ability to draw meaningful analytics from the entire care continuum, including data from regional health information organizations (RHIOs), payers, and care consumers themselves. According to a July 2016 HIMSS survey, 44% of respondents used a commercial automated claims denial management solution. Most of those use a clearinghouse vendor, while nearly equal numbers use EHR vendors and revenue cycle management vendors (17% and 16%, respectively).
  • Each of these options has plusses and minuses, but the good news is, no matter which solution you choose, you are likely to be satisfied with the results. 70% of respondents reported that they would be “more than likely” to recommend their particular solution vendor to a friend.
  • In any case, the authors conclude, any automated solution will outperform any manual claims denial management process, with fewer write-offs, better understanding of causes and trends in claims denials, more complete and rapid identification and resolution of denials, and higher satisfaction overall.
  • Finally, as a NextGen Healthcare Information Systems survey recently showed, outsourcing revenue cycle processes frees up the provider to focus on improving the quality of care and patient satisfaction, a critical consideration with today’s active, engaged and increasingly choosy healthcare consumer. As more health consumers enter the system, strategic focus on becoming their preferred and continuing choice positions the provider for success years down the road.

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