Claims denials are a significant issue for multispecialty healthcare organizations, impacting revenue, operational efficiency, and patient satisfaction. With a wide range of services, from orthopedics to cardiology, handling denials stemming from varying insurance requirements and coding practices is twice as difficult.
Effective denial management isn’t always about reclaiming dollars lost between the cracks—identifying causes, decreasing denials upfront, and smoothing the revenue cycle. We’ll discuss best practices for multispecialty health group denial management and reduce your denials, achieving better financials.
Understand the Effect of Claim Denials
Claims denials occur when an insurance company denies a filed claim, most likely due to inaccuracies, incompleteness of information, or not satisfying the requirements of a policy. Denials impact multispecialty health organizations far-reaching:
- Reduces Revenue: Unpaid denials directly impact profitability and cash flow.
- Rises in Administrative Expenses: Resubmitting and re-processing claims is time- and labor-consuming.
- Delays Treatment of Patients: Denials delay treatment in treatment authorizations, impacting patient outcomes.
- Staff Exhaustion: Repeated denials will lead to billing and administrative staff burnout.
Multispecialty medical groups can aggressively use denial management techniques to reverse such challenges and improve their revenue cycles.
Optimum Denial Management Practices
1. Assess Denial Patterns
The first step to efficient denial management is realizing why denials occur. Multispecialty health organizations must analyze denial data regularly for frequent trends and causes. Significant data points to track are:
- Denial Rate: Denials per percentage of all submitted claims.
- Top Denial Reasons: The most frequent reasons are coding mistakes, missing documentation, or eligibility.
- Payer Specific Trends: Reasons and frequency of denials by a specific year insurance company.
By establishing trends, practices can focus on the most frequent and costly issues.
2. Standardize Coding and Documentation
Inadequate coding and poor documentation are leading causes of claim denials. Multispecialty health organizations should:
- Use Current Code Sets: Ensure staff are current with the latest ICD10, CPT, and HCPCS codes.
- Use Documentation Checklists: Prepare templates by specialty to provide coverage for the information required.
- Regular Audits: Monitor coded claims and documents for compliance and accuracy.
Standardization prevents mistakes and confirms claims are payer-compliant.
3. Confirm Patient Eligibility and Benefits
Ineligibility issues, like outdated insurance benefits or noncovered services, are among the leading reasons for denials. To prevent such issues:
- Confirm Eligibility Before Scheduling: Use real-time eligibility tools to confirm benefits and coverage.
- Notify Patients: Patients should be informed of their share of the responsibility, including copays, deductibles, and non-covered services.
- Train Front Desk Staff: Train staff on checking insurance information and responding to patient inquiries.
Preventive eligibility verification prevents denials and enhances patient satisfaction.
4. Automate Prior Authorization Processes
Prior authorization denials can stall treatments and disrupt revenue cycles. Multispecialty health groups must:
- Centralize Prior Authorization Activities: Designate a team to process all authorization requests.
- Use Automation Tools: Purchase software that tracks authorization status and sends reminders for renewals.
- Establish Payer Relationships: Establish direct relationships with payers to act on authorization problems in a timely fashion.
Efficient prior authorization processes reduce denials and allow for timely patient care.
5. Utilize Real-Time Claim Scrubbing
Real-time claim scrubbing is achieved through software that scrubs claims for errors before submission. This provides for the identification and correction of errors like:
- Incorrect or missing codes
- Inaccurate or missing patient or provider information
- Non-compliance with payer-specific rules
By correcting the errors in advance, practices avoid huge denial rates.
6. Train and Empower Staff
Denial management is initiated by trained and motivated staff. Multispecialty healthcare organizations must:
- Provide Continuous Training: Keep staff current on coding guidelines, payer rules, and best practices in denial management.
- Encourage Communication: Facilitate billing, clinical, and administrative staff communication to resolve denial-related issues.
- Reward Successes: Reward success in denial reduction to boost team morale.
An educated team is necessary for effective denial management.
7. Monitor Key Performance Indicators (KPIs)
Tracking KPIs helps monitor the success of denial management processes and where to improve. Some crucial KPIs are:
- Denial Rate: Denial rate as a proportion of claims denied.
- FirstPass Resolution Rate: FirstPass resolution rate is a proportion of claims resolved on the first submission.
- Days in Accounts Receivable (AR): Settlement days for denied claims.
- Recovery Rate: Overturned denied claims as a percentage.
These measurements must be monitored continuously to ensure continuous process enhancement in denial management.
8. Appeal Denials Strategically
Denials don’t have to be final. Multispecialty health organizations need a formal appeals procedure for denied claims:
- Review Denial Reasons: Ascertain the reason for denial and get supporting evidence.
- Submit Appeals on Time: Adhere to payer timelines to avoid lost revenue.
- Monitor Appeal Results: Monitor the appeals success rate to assess trends and adjust accordingly.
Timely proactive management of appeals will restore significant revenue.
9. Leverage Technology and Analytics
Denial management strategies are characterized by advanced technology and analytics. Multispecialty medical groups will need to invest in:
- Revenue Cycle Management (RCM) Software: Automates claim submission, tracking, and denial management.
- Predictive Analytics: Identifies high-risk claims and potential denials before submission.
- Reporting Tools: Generates comprehensive denial patterns and performance metrics reports.
Technology makes processes more straightforward and provides actionable insight for optimization.
Denial management is a critical revenue cycle management component of multispecialty health organizations. By analyzing denial patterns, standardizing processes, using technology, and empowering employees, practices can decrease denials, enhance cash flow, and improve patient care. However, the easiest option is to outsource the whole operation to a team of specialists.
Effective denial management is not only about dollars for multispecialty health practices—it’s also about strategy. By implementing these best practices, your practice can become an expert in denial management and thrive in the long term.
