How to Get Claim Denials Under 5%
To run an effective revenue cycle, you have to manage claim denials well.
Of course, the best way to manage denials is to avoid them in the first place, and this should be a top priority. The best-performing healthcare facilities generally have claim denial rate under 5 percent.
Claim denials can drain your revenue.
One problem is that few hospitals follow up on claims by appealing them or submitting a corrected claim, and insurers are fine with this, because it saves them money.
But claim denials represent one of the biggest causes of lost revenue for medical facilities, and adopting a set of best practices surrounding claims can help keep denial rates low and make appeals successful more of the time.
- Know the Most Common Reasons for Claim Denials
Some claims are rejected, or sent back for containing errant information, like the wrong patient ID number. Avoiding this is largely a matter of being meticulous in creating claims and reviewing them before sending. Other times, claims are denied, not because of incorrect information, but because the insurer contends the claim was invalid for any number of reasons, such as:
? Neglecting to obtain pre-authorization when necessary
? Not meeting medical necessity requirements
? Issues related to procedure bundling
? Not filing claims in a timely manner
These may or may not be the reasons behind your particular claim denials, but if you're not sure where to begin figuring out why claims are denied, it's a good place to start.
2. Addressing Claim Denials at the Root Level
Getting claim denials under control means determining the root causes of your denials. Doing this can be hard work, but it can make a positive difference in your revenues if you do. The first step is to review denied claims from the previous quarter and take notes on why they were denied. You may notice trends, like claims being filed late, or repeated issues with pre-authorization.
If you identify a trend in claim denials, you can address the cause by reviewing the entire claims submission process end to end. Ensure scheduling and intake personnel understand how to conduct pre-authorizations and when they are necessary, and if claims are repeatedly submitted late, examine the workflow process to see where it could be accelerated or automated.
3. Making All of This Part of an Overarching Strategy
A clean claims strategy should be a strong priority.
Simply putting out metaphorical fires when dealing with claim denials isn't a good strategy for achieving and maintaining high clean claims rates. Ultimately, your overarching strategy for keeping denied claims to a minimum should include counting denied claims, identifying why they were denied, and tracking claims to measure clean claims performance over time.
Doing this effectively requires full understanding of your billing management workflows and medical billing software. Problems leading to denied claims may be found at just about any point in the patient cycle, from when they first schedule an appointment until the insurer pays (or doesn't pay) the claims.
4. Have a Denial Appeal Process
Naturally, you'd like to never have to appeal a denied claim, but that's not realistic for most practices. Develop a process for dealing with denied claims, and make sure your billing staff understands what to do and what documentation is required. It's also important to know how different insurers deal with appeals. For some, a phone call may suffice. For others, you may have to submit more forms or documentation to get them to even consider your appeal. Having a streamlined claims process helps, because it can eliminate the problem of claims being denied due to late filing.
5. Set Goals and Monitor Progress Toward Them
As with any type of business improvement measure, setting goals and then tracking your progress toward them is essential to minimizing claim denials. Goals should be shared with all affected staff members, as should the mechanisms for how progress will be tracked. Every quarter, you should find out what the numbers tell you compared to the previous quarter. When you reach your goals for minimizing claim denials, let your team know. Achieving goals can be terrific for morale, and it's okay to celebrate the big successes.
One problem is that few hospitals follow up on claims by appealing them or submitting a corrected claim, and insurers are fine with this, because it saves them money. But claim denials represent one of the biggest causes of lost revenue for medical facilities, and adopting a set of best practices surrounding claims can help keep denial rates low and make appeals successful more of the time.
6. Know the Most Common Reasons for Claim Denials
Some claims are rejected, or sent back for containing errant information, like the wrong patient ID number. Avoiding this is largely a matter of being meticulous in creating claims and reviewing them before sending. Other times, claims are denied, not because of incorrect information, but because the insurer contends the claim was invalid for any number of reasons, such as:
? Neglecting to obtain pre-authorization when necessary
? Not meeting medical necessity requirements
? Issues related to procedure bundling
? Not filing claims in a timely manner
These may or may not be the reasons behind your particular practice's claim denials, but if you're not sure where to begin figuring out why claims are denied, it's a good place to start.
8. Making All of This Part of an Overarching Strategy
A clean claims strategy should be a strong priority.
Simply putting out metaphorical fires when dealing with claim denials isn't a good strategy for achieving and maintaining high clean claims rates. Ultimately, your overarching strategy for keeping denied claims to a minimum should include counting denied claims, identifying why they were denied, and tracking claims to measure clean claims performance over time.
Doing this effectively requires full understanding of your billing management workflows and medical billing software. Problems leading to denied claims may be found at just about any point in the patient cycle, from when they first schedule an appointment until the insurer pays (or doesn't pay) the claims.
9. Have a Denial Appeal Process
Naturally, you'd like to never have to appeal a denied claim, but that's not realistic for most practices. Develop a process for dealing with denied claims, and make sure your billing staff understands what to do and what documentation is required. It's also important to know how different insurers deal with appeals. For some, a phone call may suffice. For others, you may have to submit more forms or documentation to get them to even consider your appeal. Having a streamlined claims process helps, because it can eliminate the problem of claims being denied due to late filing.
10. Set Goals and Monitor Progress Toward Them
As with any type of business improvement measure, setting goals and then tracking your progress toward them is essential to minimizing claim denials. Goals should be shared with all affected staff members, as should the mechanisms for how progress will be tracked. Every quarter, you should find out what the numbers tell you compared to the previous quarter. When you reach your goals for minimizing claim denials, let your team know. Achieving goals can be terrific for morale, and it's okay to celebrate the big successes.