How To Improve Healthcare Claim Denial Management?
Today, most healthcare organizations lose 3 to 4% of net revenue due to payment denials. With the drastic changes in the 2021 healthcare industry, here is how providers can stay ahead of their revenue cycle by improving healthcare claim denial management. Let’s look at the proven ways to improve healthcare claim denial management and how RCM solutions can improve your practice bottom line.
What Is A Denied Claim?
A rejected claim contains one or more errors and neglects to meet specific formatting, coding measures, and necessary information requirements. Since a rejected claim has never been processed by a clearinghouse, insurance payer, or the Centers for Medicare & Medicaid Services (CMS), the claim is not considered received, and it didn't endure the mediation framework. Then how to resubmit a claim after rejection? Once you identify the errors which lead to claim denial and after correcting those errors you can able to resubmit the claim again.
The claim has been received and processed by the insurance or third-party payer, but it has been deemed as unpayable for services received from a healthcare provider. Payers will send you an Explanation of Benefits (EOB) or Electronic Remittance Advance (ERA) that clarifies why the claim was denied.
The Reason For Claim Denials
Before resubmitting the corrected claims, it's better to know the reasons for the claim denials. Claim denials fall into three categories: administrative, clinical, and policy. A majority of denied claims are administrative errors and once corrected you can resubmit them to the insurance payer. Denied claims with a clinical reason may require you to submit an appeal letter: always send this by certified or registered mail.
One of the first steps in managing denied claims is to identify the reason for the denial and determine what steps you need to take to appeal the claim. Create a comprehensive workflow that can track your claims as they enter and leave your system.
4 Tips To Improve Healthcare Claim Denial Management
1. Understand The Reason Behind The Claim Denials
Not all patients are knowledgeable enough when it comes to the insurance denial system, and educating them to file a claim properly can help in solving this issue.
The ideal way to minimize claims denials is to monitor your claims submission reports regularly or designate professional staff to take care of them. You should also have a manager assigned to keep track of the fee schedule of each insurance carrier, since many times even if your practice is getting paid, you might be getting overpaid or underpaid.
Understanding the fundamental reasons behind the denial of the claim will lead to maximized revenue collection, better patient satisfaction, and preventing future claims from taking place.
2. Implement Advanced EHR System
Practices around the globe have seen a significant decrease in denials after implementing an electronic health record system that can verify patient eligibility in real-time. As the eligibility can be confirmed much before the patients' first appointment, healthcare practices get more time to get their insurance coverage related questions cleared up. The EHR system also helps to track the claim denials and immediately resubmit them.
3. Implement A Claims Denial Log
Maintaining a claims denial log is essential to spotting early trends and reacting before things get out of hand. Today, with rapid advancements in technology, it has become easier to maintain electronic logs as part of your practice management system. The most basic components of a claims denial log include
- Documentation received from the insurance company
- Specific medical code which was denied
- Service date
- Total amount requested
- Individual claim numbers
- Final status (resubmitted, charge adjusted, or appealed)
Claims denial logs can make you more proactive in reacting to denials from insurance companies, especially if your denial rate is too high. You can not only pinpoint how many denials you chased after, but also make sure mistakes made previously never occur again.
4. File Appeals Within A Week
The backbone of a successful denial management process is the ability of your practice to be able to handle claims properly and resubmit an appeal in double-quick time. Your set process should be fast and reactive enough to file an appeal within a week of the denial being received.
To set up the perfect workflow, you need to establish that you can track your claims as soon as they leave or re-enter your tracking system. Since many insurance carriers have their set windows within which practices can file appeals, this would allow you time to prepare a valid case before filing an appeal.
Save your practice revenue from claim denial management issues with the help of these proven tips. The best choice is to go with the revenue cycle management solution provider who will take care of your eligibility verification, credentialing, charge entry, coding, and claim submission process for achieving positive cash flow for your practice.
VOZO delivers patient-focused revenue cycle management (RCM) solutions that help hospitals in increasing cash flow by managing denied claims and improving patient satisfaction.