Denial Management Best Practices for Hospitals

denial management
March 29, 2017

Posted by MedbillingExperts / 0 Comment

Did you know a medical practice typically loses revenues to the range of 7-10% due to claim denials that could be easily avoided? Yes, you always have an option to collect money directly from the patients and avoid the spiral of claim denials. But the success rate with this approach is very slim. Hence ensuring denials remain at a minimal, say at the range of 4%, is the best way to tackle this problems.  This way, you not only avoid losing money to denied claims, but also save money needed to rework on denied claims. As per MGMA report, hospitals spend around $25 to resubmit each claim. Based on these figures, you will end up spending $2,500 in case your staff reworks 100 claims every month. What this means is it is worth your time to revisit your practice workflow to identify the root cause of claim denials.

How to identify the problem?

Yes, issues may differ depending on the practice, but most of them are standard problems found across the board such as incomplete patient information, incorrect provider name, duplication of claims submitted, missing prior authorization number (PAN), and so on. Hence pull out reports of denied claims, review each one of them, and finally zero-in on the issues that are repeatedly hampering your claims.

How to fix it?

After identifying the core issues, the next step is to establish appropriate mechanisms at each level to tackle these issues. Ideally, the mechanisms should be as follows:

At front desk: Many healthcare providers undermine the importance of training their front staff. This is a big mistake as these professionals are the first point of contact of patients. They carry out several critical tasks such as validating insurance from each and every visit, collecting copays and so on; and a minor error can cost you heavily. Hence invest time to make sure that they have the right mechanism to handle all the underlying activities.

By right mechanism, we mean arming them with technologies such as EHR and OCR scanners rather than expecting them to multitask. These systems will help your front desk staff to validate insurance eligibility within seconds and provide the most up to date information on plan coverage, deductibles, copays, and other limitations. Also, it would obviate the need to manually type information, as OCR scanner will automatically populate demographic and insurance information by simply scanning patient’s driving license and insurance card.

At healthcare delivery end: The primary duty of a healthcare delivery professional is to ensure that they send across accurate procedure and diagnoses codes to the billing department to avoid coding errors. And in case they fall short of doing it regularly, you need to undertake initiatives such as arranging coding seminars to educate them.

Leveraging technology can eliminate issues arising due to communication problems. The best practice here is to integrate your EHR and Practice Management solution rather using them as two separate standalone systems. This ensures that the right codes are automatically transferred to the billing department in real time, reducing the chances of error.

At the billing department: The primary task of the billing staff is to clean-up missing or incorrect information, and send the right claims to the insurance providers. And if they are having issues in handling this, you need to embrace EHR, which automatically withholds the submission of wrong claims by placing them in the “Incomplete claim Bucket.” Now all they have to do is to access the incomplete claim and iron out the flaws that are detected.

The Bottom-line

Internal audit helps you weed out the flaws in your practice. Hence, make it a point to carry out monthly review of your EOBs and list the problem areas. Also conduct sessions with your staff at regular intervals to understand and address the issues they are facing.

If things still don’t improve or if you find it difficult to audit on a regular basis, you can outsource denial management services to experienced providers like us.  We have an established process to assess the frequency of denials and spot patterns or aberrations which are specific to your practice. This can help you identify and fix errors in no time and reduce denials by a whopping margin. Our state-of-the-art denial management and recovery practice, has over the years, helped hundreds of our clients improve profitability significantly.

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