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The (Never-Ending) Battle on Denials

Denials have always been an uphill battle. As soon as you think you have a handle on one facet of it, the payer throws another unexpected change at your organization. Regardless of how strong your reporting, staff, and approach is with denials, they aren't 100 percent avoidable.

I came across a great article, "Staying One Step Ahead of Claim Rejections", by Senior VP of Product Operations at Emdeon, Gene Boerger, which did a great job of highlighting the impact, top reasons, and high-level approach to managing denials. Here are some of his points that hit me the hardest:

  • Approximately, 10-20 percent of claims are rejected or denied, and those claims account for 90 percent of missed revenue opportunities ("Impact of ICD-10 and Denial Management Analytics" webinar, Datawatch, 2013).
  • Revenue cycle departments often miss the opportunity to recover the revenue because 65 percent of rejected claims are never reworked ("You Might be Losing Thousands of Dollars Per Month in 'Unclean' Claims'" MGMA Connection, Medical Group Management Association [MGMA], February 2014).

Scary! Healthcare Organizations are always looking to improve their bottom line, and 90 percent of the missed revenue opportunities are in the denials ballpark! Even before denials, 65 percent of rejected claims are never reworked and resubmitted. Due to the amount work, lack of resources, and complexity of claim rejections and denials, many organizations don’t have a choice but to leave money on the table.

Tools to help in the Battle:

  • Electronic Eligibility
    • Patient ineligibility is one of the top causes for denials. By adding additional payers and checking prior to each appointment, you can prevent many of these denials.
  • NCCI and Other Edit Sets
    • Adding these edits sets into your EHR system is the first step, but controlling where and when they fire along with proper ownership is another. Making sure you are current with the quarterly updates is another small, but important moving piece.
  • Efforts to Improve First Submission Acceptance
    • The clearinghouse clean claim validation rate is a critical KPI. What would it take to improve it by another 2-3%? Getting cleans claims out on the first submission keeps the billing cycle short and eliminates the costs and efforts for resubmissions, corrected claims, appeals, etc.
  • Leverage Claims Status
    • Many Payers provide standard claim status transactions and several clearinghouses can even customize the format to make loading and utilizing the data more efficient. Avoid wasting staff time finding out a claim has been processed and paid.
  • Denials Management and Analytics
    • Having the right resources and processes to capture, work, and respond to denials in a timely manner is key. Another focus needs to be determining and addressing root causes. Analytics and reporting tools can help look for trends and formulate mitigation plans.

At The Wilshire Group, our experienced staff and Partners understand the importance of having a strong denial management program. By understanding your organization's denial causes, policies, and system configuration, we can work together to maximize the use of your existing resources and minimize your lost revenue.