These are unprecedented times for health systems and physician organizations. The financial impact of COVID-19 is likely to linger and has already significantly impacted organizations nationwide. This is especially true for providers who were already struggling to stay ahead of skyrocketing patient financial responsibility and plummeting payer reimbursements. It’s times like these that require a closer look at operational efficiencies to identify what’s working, what’s not, and how to make the most meaningful improvements quickly. Denials management is a high-impact place to begin.
Denials are on the rise
Providers have experienced a hefty increase in denial-related write-offs over recent years. In some organizations, nearly one in five claims is denied upon first submission. One of the reasons denials have increased is that payers are becoming more sophisticated in how they review claims for payment. Many now use automation and algorithms to identify issues like potential DRG downgrades and medical necessity. Another factor is the sheer number of unique payer requirements, which can be challenging to keep up with. Prior authorizations, medical necessity, workers’ compensation – each brings their own unique challenges.
Fortunately, there are steps providers can take to help reduce the number of overall denials and to improve appeals success.
Streamline your patient access workflows. Many of the top reasons claims are denied occur in the patient access workflow. Nearly a quarter of denials are caused by issues with registration and eligibility. Providers should consider replacing manual processes with revenue cycle tools that automate the entire patient access process. These tools ensure the information collected is up to date. They also help streamline the typically resource-intensive and time-consuming process of verifying coverage.
Stay on top of payer requirements and documentation. More than 23% of claims are denied because of issues with precertification and authorization requirements (12.4%) or medical documentation (10.8%). For providers with limited resources and busy practices, it can be easy for these requirements to slip through the cracks. Problems in this area often lead to timely filing issues. Denials caused by timely filing problems are among the hardest to overturn. Revenue cycle technology can help by flagging payer requirements for you so they won’t be overlooked or discovered too late.
Make sure claims are clean upon first submission. Other top denial reasons involve missing or invalid claim dates and 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 that see a lot of turnover. In those environments, team members may be less experienced in revenue cycle processes. These tools act as a gatekeeper that keeps your revenue cycle moving along.
Shore up your denials management processes. It is estimated that 67% of denied claims are never reworked.That can add up to nearly three percent of lost revenue. Many providers choose to work only the highest-value claims, but that overlooks the opportunity in low-hanging fruit—or 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.
Increase visibility into denial patterns. How are denials impacting your bottom line? Without deep insight into the revenue cycle, it is impossible to know. Providers need the ability to identify which payers deny the greatest number of claims and why. It could be because they require more documentation than other payers or that their timely filing deadlines have shortened. Or it could be that the biller submitting claims to that payer needs more training. The point is that you need the data so you’ll be able to take steps necessary to reduce denials and stop money from sneaking out the back door.
Capture every dollar you’re owed
The cost of denial-related write-offs in lost revenue opportunity can run into the millions each year. Even in good times, providers can’t afford to work for free. But in our current healthcare reality, doing so can seriously inhibit financial viability for many years. The ability to manage denials effectively could be a bellwether for long-term improvements. But some organizations just don’t have the resources necessary for purchasing, implementing, and managing new revenue cycle technology solutions.
These providers can benefit by outsourcing their denials-related processes. HBCS provides insurance billing and follow-up services that maximize reimbursement on all claims. And that means getting every dollar you’re owed by optimizing denials management. 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? HBCS can help you find out. We are currently offering a complimentary denials assessment. In it, we’ll identify your biggest problem areas and suggest preventative strategies for reducing denials overall. We will also provide an overview of what you could save by partnering with HBCS to manage denials for you. Providers that partner with HBCS experience improved financial outcomes with less effort.