Revenue Cycle Management Blog | GroupOne Health Source

Are You Preventing Denials?

Written by Kaitlyn Houseman | November 7, 2013

Increased demand for healthcare services as a result of an aging U.S. population should make for a successful and profitable medical practice.  However, improving a practice’s cash flow has become anything but easy in today’s changing reimbursement environment. 

The impact of electronic health records software in combination with diminishing reimbursements has proved to be a significant obstacle for physician practices; however, an untapped opportunity exists.  According to the Advisory Board Company, roughly 90 percent of denials are preventable, and 67 percent of denials are recoverable.*

Redesign Your RCM Process

Use data from your denials to improve your processes and redesign your revenue cycle management.  Find out the source of the denial first.  Claim denials are often caused from a registration error, lack of medical necessity, insurance verification not performed, charge entry error, documentation to support the claim is not there, etc.  

Measure your practice’s denial data and find out the source of the denial.  Identify the top three to five reasons for your practice’s denials and take action.  Less than 5 percent of claims should be denied on the first submission and your practice can make the necessary changes internally if denials are being caused due to practice errors.  If payer errors are causing a high denial rate, you will need to make sure that your staff understands the payer’s reimbursement policies. 

Reimbursement Guidelines 

Some payers publish guidelines regarding reimbursement.  Your staff should be familiar with these guidelines to save time and effort by knowing when to appeal and when not to appeal a denied claim. Upon deciding which denials are inevitable and which can be reworked for an appeal, you will need to have an systematic way to organize the follow-up activity. 

Denial Follow Up

Denial follow up procedures need to be accurate and timely.  To improve this process, you may want to consider having a dedicated appeals team to meet appeal filing deadlines.  Be sure to have a list of appeal deadlines for each payer and prioritize by the claims that have the shortest deadline yet have the highest dollar amount. Denials can be prevented but emphasizing the importance of appealing denials to recover the money due should not be overlooked. 

Find the Source of the Problem

Don’t waste your time and your staff’s time with continuously reworking claims.  Find out the source of the problem and prevent the denial in the first place.  Being proactive and reactive with your claims can result in a dramatic increase in your practice revenue.

*The Advisory Board Company as reported in “CFO Leadership Strategies for Managing Denied Claims,” a Third Millennium Healthcare Systems white paper.