Claims denials are a big source of revenue leakage. According to one recent report, around 67% of healthcare leaders have seen an increase in claims denial over the past year.[1] The crunch is commonly attributed to frequent payer policy changes, lengthening reimbursement times, and increases in claim submission errors. The situation is critical and requires revenue cycle leaders to take a closer look at operational efficiencies to identify how to efficiently make meaningful improvements.

The American Hospital Association reported that 89% of hospitals and health systems have experienced an increase in claims denials over the past 3 years, with 51% saying the increase has been significant.[2] Here are 4 things you need to know today to help reduce denials.

Streamlined Patient Access Workflows Can Help.  The most common reasons claims are denied occur in the patient access workflow. Missing or incorrect eligibility information are top causes of denied claims.[3]Although most of the information needed for a claim is generated during the registration process, many organizations do not have optimized solutions in this stage. Manual processes and bolt-on solutions should be replaced with revenue cycle tools that automate the entire patient access process. These tools ensure a seamless process across scheduling, registration, and financial clearance.

Managing Changing Payer Requirements and Documentation is Critical.

Among the top reasons for claims to be denied are because of issues with precertification and authorization requirements and medical documentation. The average health system saw 11,000 claim denials due to prior authorization and other factors in 2022.[4] When these frequent changes are being monitored by a staff that is reduced or stretched-too-thin due to staffing shortages, it can result in requirements slipping through the cracks. Yet problems in this area often lead to timely filing issues and denials which are among the hardest to overturn. Revenue cycle technology can help by automatically flagging payer requirements, so they won’t be overlooked or discovered too late.

Leveraging Automation Can Increase Clean Claims. 14.6% of all denials are caused by missing or inaccurate claim dates. Inexperienced coders, high turnover, and overworked staff can lead to an increase in errors that cause rejections and denials. This, in turn, leads to more work for your staff to rework the denials, as well as poor cash flow and greater write-offs. Another top denial reason is coding errors. These are typically caused by errors in data entry. While you can’t avoid all such errors, using tools that filter claims before they’re sent allows staff to fix errors before they get to the payer’s adjudication system. This is especially important for departments experiencing staffing shortages. These tools act as a gatekeeper that keeps your revenue cycle moving along.

Shore up Denials Management Processes to Decrease Reimbursement Delays. Denials rose to 11% of all claims last year, up nearly 8% from 2021.[5] It is estimated that 67% of denied claims are never reworked.[6]That adds up to lost revenue. Many providers choose to work only the highest-value claims, overlooking those that would bring the fastest return for the smallest effort. Even if all denials are in the queue, inefficient denial workflows can hamper your best efforts. Automating denial management processes can help by flagging denials and providing a root cause analysis for each one. Staff spend less time researching the issue and are able to work denials faster and more effectively.

A Better Solution

The cost of denial-related write-offs in lost revenue opportunity can run into the millions each year. Hospitals and health systems can benefit by outsourcing their denials-related processes. HBCS provides insurance billing and follow-up services that optimize reimbursement on all claims. The HBCS denial management solution uses 835 technology, advanced processes, and reporting analytics to identify, measure, and successfully reverse denials.

Do you know what denials are costing your organization? Now is a critical time to identify gaps preventing optimal reimbursement so you can course-correct before it gets further into the calendar year. HBCS can help you find answers. We are currently offering a complimentary denials assessment. We’ll evaluate potential gaps in overturning denials, decreasing A/R days, and increasing net patient revenue. Providers that partner with HBCS experience improved financial outcomes with less effort.

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