How to Deal with Claim Denials

Dealing with claim denials
February 14, 2013

Posted by MedbillingExperts / 0 Comment

One of the more frustrating aspects of medical billing is claim denials. After having provided services to your patients, it is reasonable to want to be paid – and frustrating when a claim denial comes through.  The Department of Labor estimates one in seven claims made under employee health plans will be denied this year.  Other estimates indicate that 9.2% of claims are denied.

  • If denial rates are high in a practice, it is not hard to foresee that there will be consequences for your bottom line.  Improving your denial management is a surefire way to increase profits and relieve headaches.

Analyze Current Denials

The first thing to do to improve your denial management is to understand the denials you are getting.  What are the reasons –a lack of medical necessity, no preauthorization, erroneous data or demographic information, a coding error, or something else?  What percentage of your claims is being denied, and what is the most common reason?  Keeping track of this may allow you to understand what your office – whether your staff or physicians – could be doing better to avoid denials.  Once you know this, you can institute a plan to reduce denials.

Train Your Staff on Denial Management Specifics

Make sure that a few members of your office staff are very conversant with denials and denial management.  Make sure they know how to analyze data correctly; that they understand the time limits, and have a “tickler” system for making sure they stay within time limits.  Make sure that those who handle appeals understand the reason for the denial, the medical necessity, and the codes filed on the claim.

If you must appeal by written letter (as opposed to a phone call, which is sometimes all it takes), make sure that your letter is professionally written and clear, with supporting documents.  Send it by certified mail.

  • Make sure you’re familiar with the managed care contracts you sign and with the appeal process from each, as they vary from company to company.

Streamline Workflow with Automation

Automate as much as makes sense – especially in scanning insurance cards, as this will reduce errors from incorrectly added data.  Let the staff know when processes are working well and financial benefits are being reaped – this will motivate them. Using software to keep track of the successes and to analyze the data; it’s easier to motivate people when they can see the real change their actions are making.

Obviously, the easiest way to get paid by a claim is to have your claim approved the first time.

  • Make sure that you have staffs who know how to do claims right, cleanly and professionally, the first time.

Making sure that you are on top of denial management will save you and your staff time and increase your cash flow.  Having properly trained staff and good analysis procedures will help you to achieve this goal.

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