Medical Claim Denials Cost Hospitals $262 Billion Annually
A recent analysis by Change Healthcare revealed a shocking statistic about claims denials and their financial impact on healthcare practices. The finding revealed that out of roughly $3 trillion in medical claims submitted by hospitals in the US last year, approximately 9% of charges were initially denied. This translated into an accumulated loss of about $262 billion per annum sparking huge cash-flow issues and recovery costs to hospitals.
A deeper analysis of the figures further revealed that as much as 3.3% of net patient revenue, amounting to about $4.9 million per hospital, was left on the table due to these denials.
Although hospitals were ultimately able to secure a payment for 63% of initially denied claims, the effort came with a huge price-tag — approximately $118 per claim — not to mention the overhead cost associated with foregoing the payments while hospitals claw back the funds.
If hospitals cannot secure a denied claim, they’re left eating the cost or billing the patient for the services. The first options is not feasible, while the second option in most probability will alienate patient and affect satisfaction scores, which in the long run is not good for the financial well-being of the practice.
So what is the best way out of the situation? It is avoiding denials in the first place and this is what we specialize in. We understand that a good denial management process is not simply about working on denials; it is about systematically gathering the data, decoding it and using the intelligence gleaned from it to incorporating corrective measures that permanently eliminate denials. By bringing the best of available technology and human resources, we strive to do exactly the same.
One of the USPs of our denial management services is our ability to report and measure all claims that are being denied at the payer level. Leveraging this level of data and intelligence, our Denial Management specialists can easily spot and fix issues that are leading to the denials — whether it is issues with the claims or issues with the payers — and check the flow of unpaid claims into your medical billing process. Once we do this, then chances are that the revenues for your practice will start to soar with each passing day.