A denial-free revenue cycle is something every provider strives for but seems nearly impossible. The industry average denial rate is above 10% and going up. Revenue cycle specialists see a multitude of reasons for claim denials. Here are a few tips for minimizing claim denials:

Start at the Beginning

The first step to managing your denials is understanding the strengths and weaknesses of each step of the process. Analyze and determine the most common reasons for past claim denials. Are there issues regarding patient eligibility? Are procedure and diagnosis codes not matching up? Maybe claims are not being filed in a timely manner or information is consistently missing from claims.

Once you have pinpointed the most prevalent reasons for denial, spend some time with the employees to identify what they need help with. If patient eligibility is one of the concerns, try to understand the process in place for patient eligibility verification. You may see that there is not quite a set process and team members put a focus on other parts of their job. Hiring an additional employee with the main responsibility of handling patient eligibility may be a solution.

Be Proactive Rather Than Reactive

Taking the extra step to double check that the claim has been created and submitted to the best of your team’s ability is worth the time and money saved by preventing denials. It has been reported that over $262 billion worth of revenue is lost due to denied claims. Adding a step in the process for a final review prior to submission helps avoid the added cost and wait time for reworking and resubmission of denied claims.

Sometimes, claims are submitted knowing that they will be denied. For example, a claim for a male diagnosed with breast cancer has a high chance of being denied since the diagnosis is normally associated with females. When situations like this arise, it is common practice to submit an appeal with the original claim submission. This also reduces the time it will take to see reimbursement for the services provided.

Ongoing Staff Training

There are multiple coding standards used when creating a medical healthcare claim, including different forms of coding. Medical coding staff should be trained as often as medical codes are updated. According to the AHA, codes are updated annually, meaning that staff should be trained at least annually. Ensuring that staff has a full understanding of code changes and additions will decrease the likelihood of claim denials due to inaccurate coding.

Incorporate New Tools

With effective revenue cycle management becoming essential for healthcare organizations, new software tools are being introduced in the market. Tools that use Artificial Intelligence and Machine Learning (AI/ML) technologies are becoming increasingly popular in revenue cycle management. AI/ML can be used for denial management in both in-house and outsourced revenue cycle processes.

Continuous Analysis

Although your initial evaluation of the revenue cycle coupled with efforts to improve its processes will help in the short run, it is imperative that the processes be analyzed on a continuous basis. Top reasons for claim denials can change as often as monthly or quarterly. Establishing Key Performance Indicators (KPIs), such as the Clean Claim Rate, and evaluating them on a regular basis will help ensure the most effective processes are in place to reduce claim denials and increase revenue. If the KPIs are not being met, that is a sign that it is time to start from the beginning again to reevaluate the current revenue cycle processes.

Following these simple steps will help avoid the most preventable revenue losses within the healthcare industry. For more information on how Data-Core Healthcare can help keep your revenue where you want it to be, visit our website.


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