Improve Your Performance with Strategic Healthcare Denial Management

With the ever changing landscape of healthcare, healthcare organizations are no stranger to the administrative challenges and burdens that are created when managing denied claims. When medical claims are denied, roadblocks  are created between providing high-quality patient care and receiving timely and accurate reimbursements. Managing claims denials has continued to cause challenges and can create large financial stress for healthcare organizations if not properly addressed. 

Payers have grown pickier about the claims they approve, with increasing denial rates and a growing number of ways in which claims can be denied. A report from Kodiak RCA indicates that about 12% of claims across both Medicare and commercial payers are initially denied. From reasons such as insufficient documentation, to prior-authorization issues, denials can add up quickly and result in significant reimbursement delays. If denied claims are not reviewed for appeal or correction, providers run the risk of not being paid the accurate amount or in some scenarios not being paid at all. 

With nationwide denial rates hovering around 12%, healthcare organizations can face the reality that they might not receive payment for up to 12% of services rendered. For many smaller clinics and rural hospitals, this can make or break the success of their financial future. Industry staffing shortages have left many entities without the bandwidth to efficiently appeal denied claims, forcing them to issue unnecessary administrative write-offs and miss out on unclaimed revenue.

Mismanaged denials have become a big enough financial threat that many organizations are now spending money in order to save money. Many revenue cycle teams now include denials management staff specifically dedicated to managing denied claims, submitting appeals, and tracking trends. For example, a denials management team may notice a sudden increase in coding denials for a certain procedure from a particular payer. Patterns like this can be fixable but can become costly if not addressed in a timely manner.

A Proactive Approach to Successful Denial Management

Luckily, challenges with claims denials don’t have to be a dead end for healthcare organizations. Taking a proactive approach in other areas of the revenue cycle can help reduce denial rates and improve overall financial performance. 

Clean Data Equals Clean Claims: To strategically improve denial rates, it is wise to start at the beginning of the revenue cycle process. Errors made during the pre-access and patient access processes can lead to an increase in denials down the road. Missing patient information or prior-authorizations can raise red flags for payers and cause avoidable denials. Collecting all pertinent information at the start of the patient experience is critical to ensuring an accurate claim is submitted for payment.

Clinician Documentation Improvement: Clinical documentation is another essential piece of the Denial Management puzzle. If clinical documentation is not thorough or accurate, it can impact how an encounter is coded and therefore how it is billed. Payers can deny payment if there is not enough supporting documentation or if they suspect improper coding. Implementing a Clinical Documentation Improvement (CDI) program can strategically help physicians stay up to date on documentation best-practices and can help educate them on how they can prevent future denials. 

Prioritize Accounts: Prioritizing denials by dollar amount and timeliness is an important strategy to improve your Denial Management. In order to maximize lost revenue, healthcare organizations should focus on higher value cases that could lead to more financial return if resolved. Most denials also have appeal deadlines, so organizing the denials queue by the earliest due date can also ensure timely filing and increase potential revenue.

Take Charge of Your Denials

Interested in how to strategically reduce your organization's denial rates? Signature Performance is on a mission to reduce administrative costs and burdens in healthcare and are dedicated to helping healthcare organizations maximize their financial outcomes. Our team of subject-matter experts will help you leverage the latest technology to reduce your denials and optimize your revenue cycle processes. 

Connect with our team today to learn more about how you can take the next step toward increasing your organization’s financial stability.