For 2024 – most healthcare practices will likely adopt stronger claims denial management strategies for handling the rising challenges of claim denials. A survey concluded that over 51% of respondents plan to be more aggressive with their claim denial management – while 46% intend to boost their payment collection efforts with the payers. Moreover, some organizations will focus more on Medicare Advantage plans.
Before we dive into the top claims denial management strategies, let’s look into the top 5 medical billing denials:
Top Medical Billing Denials
Denials in medical billing usually fall into two categories: hard and soft. Hard denials are irreversible, resulting in lost revenue, while soft denials, though temporary, can be paid if the provider corrects the claim or provides additional information. According to the AMA National Health Insurer Report Card, here are the top reasons for medical billing denials:
1. Missing Information
Leaving a single required field blank on a claim form can result in denial. Demographic and technical errors, like a missing modifier, an incorrect plan code, or no Social Security number, account for 61% of initial medical billing denials and make up for a massive 42% of denial write-offs.
2. Duplicate Claim or Service
Duplicates, where claims are resubmitted for a:
- Single encounter
- On the same date
- By the same provider
- For the same beneficiary and service item
-make-up is another important reason for Medicare Part B claim denials, which reaches up to 32%.
3. Service Already Adjudicated
This error occurs when benefits for a particular service are already included in the payment for another service or procedure adjudicated.
4. Not Covered by Payer
Denials for procedures not under patients’ current benefit plans can be prevented by checking details in the insurance eligibility response or contacting the insurer before administering services.
5. Limit for Filing Expired
Most payers require medical claims to be submitted within a specific timeframe. Correcting inpatient medical coding errors, which contributed to over 81 percent of complex claim denials in the last quarter of 2015, can cause delays, pushing medical billing past the deadline.
While addressing denied medical billing claims is vital for revenue cycle management, relying solely on this can slow cash flow to risky levels. A more robust financial approach is to measure the volume and causes of denied medical billing claims to prevent them before they occur – and that brings us to the top 7 claims denial management strategies.
Understanding 7 Claims Denial Management Strategies
Let’s explore the seven best healthcare claims denial management strategies:
1. Understanding the Reasons for Claim Denials
Understanding the reasons behind your patient’s denied claims marks an important starting point. The knowledge lays the groundwork for creating a streamlined process that maximizes revenue and steers clear of the downsides of claim denials. Recognizing that patients might not fully understand the details of the claims denial system, educating them about the claims denial management process and the reasons behind the insurance claim denial becomes essential.
Providing timely assistance to patients through the insurance claim process not only creates a strong, and lasting relationship but additionally contributes to the overall success of your organization. Therefore, explaining the causes of claims denial to patients is essential for the smooth functioning of hospital/healthcare practice duties.
2. Optimize Claims Denial Management Process
While manually addressing erroneous claims can be effective in the short term, it’s essential to consider a more efficient process for long-term success. An effective healthcare claims denial management procedure not only reduces current issues but also works towards preventing future challenges. Losing track of denied claims and maintaining incomplete records threaten revenue and a provider’s credibility. Implementing an organized system to track and manage denied claims eases your staff’s workload and enhances their overall efficiency. Taking up the new tools available in the market enables your team to handle and monitor denials more efficiently. Therefore, it is essential to maintain a complete outlook – when resolving recurring issues.
Next on our medical claims denial management strategies are:
3. Swift Claim Processing
Did you know that over 65 percent of claim denials are never filed again? To avoid this, having an active claims management team is important. Your team should be trained in handling claims skillfully and resubmit any appeals if needed. Establishing a solid workflow is an essential part of claims denial management strategies. When you receive a denial from an insurance company, your team should act quickly to process the claim within a week. A hands-on claims denial management team ensures prompt payments. If there are common and repeating errors, consider improving your claims filing strategy to address those issues.
4. Implement Claims Denial Log
The claims denial management strategies also include maintaining crucial data – which is much easier with a claims denial log. An electronic version is even better, ensuring access to relevant information across the organization. With the electronic logs, you can:
- Archive conversations and documentation with insurance providers to analyze and improve your claim denials.
- Record service dates, demanded amounts, distinct claim numbers, and denied medical codes for easy access later.
Implementing a claim log is yet another one of the key claims denial management strategies. It helps assess past filing mistakes and improve your coding and billing system. So, document your interactions with insurance providers to process claims efficiently.
5. Identify and Understand Common Healthcare Claims Denial Trends
Similar to all industries, the healthcare sector is also constantly evolving. The trends in claims denial are continuously changing to align with US healthcare’s shifting needs and processes. Recognizing various common denial forms is the first of several practical steps in claims denial management. By analyzing these trends, you better understand the significant issues affecting your claims denial management team.
Subsequently, upgrading your software to address these issues can result in regular cost savings. Therefore, enhancing your knowledge of the trends provides a processing edge over competitors and contributes to substantial cost savings.
Number 6 on our medical claims denial management strategies is:
6. Outsourcing Your Claims Denial Management Process for Efficiency
If you are looking for an expert team to handle your claim denials, consider outsourcing your denial management MedICD. Outsourcing can lead to savings in both money and effort while ensuring efficient claims processing. Expert denial management providers have specialized teams trained to understand and manage the complexities of the insurance system on your behalf. You can focus on your core competency by delegating these tasks to an efficient medical billing company like us. Furthermore, outsourcing major denial management issues can save time, effort, and money.
7. Boost Productivity with Incentive Programs
The key to minimizing claim filing errors often lies in having a well-trained and motivated staff. If concerns about ever-increasing software costs remain, consider introducing incentive programs to reduce your denials. Bonuses or time-offs can introduce healthy competition among your staff, resulting in more rewarding outcomes. Implementing such incentives often significantly reduces denials, making it a cost-effective and efficient solution to denial management challenges. Moreover, sharing valuable information about the latest trends in denial management processes enables your team to contribute effectively to your claim filing procedures. Recognizing and rewarding your employees for their good work can yield positive results in your claims denial management strategies and efforts.
So, there you have it, the top 7 claims denial management strategies – for effective denial resolution and increasing revenue.
In conclusion, adopting robust claims denial management strategies is vital for healthcare practices in 2024. Understanding the top reasons for medical billing denials, such as missing information and duplicate claims, sets the stage for effective denial resolution. The top seven strategies discussed – from understanding denial reasons to outsourcing denial management – form a comprehensive approach for minimizing errors and maximizing revenue. Choosing the right revenue cycle management partner, like MedICD, is important for continuous success. Furthermore, addressing claim denials through strategic outsourcing ensures financial efficiency and long-term success in the ever-evolving healthcare industry.