Denial Management / AR Management
WHAT IS DENIAL MANAGEMENT PROCESS IN MEDICAL BILLING?
Healthcare firms have several challenges when it comes to handling medical billing denials. The time, money, and resources required to resubmit denied claims and lose income add up at the end of the year, which can seriously harm your healthcare company’s revenue cycle.
Effective denial management in the healthcare industry is therefore crucial to the success of your company. This manual will go over the denial management procedure in medical billing, explain its importance in the healthcare sector, and provide best practices suggestions for enhancing revenue cycle management (RCM).
WHAT IS DENIAL MANAGEMENT IN MEDICAL BILLING?
A methodical strategy to identifying and addressing the problems causing medical claim denials is called denial management.
But the process should accomplish more than just this; it should also reduce the possibility that claims will be rejected. This will guarantee a stable cash flow and quicker payment to the practices.
One of the things the denial management team has to do to streamline the denial management process is to identify patterns between recurring rejection codes and other kinds of claims.
The goal of trend monitoring is to spot difficulties related to patient registration, billing, and medical coding so that future claims may be successfully contested and these problems can be fixed.
The team also looks at the payment histories of specific payers in order to identify any deviations from the average trend.
WHAT ARE THE DIFFERENT TYPES OF CLAIM DENIALS IN MEDICAL BILLING?
Refusals of claims can stem from a variety of clinical factors, including as a procedure being carried out by an unqualified practitioner or being determined not to be medically necessary.
Additionally, they could begin in the business office, originating from any of the several divisions involved in creating, overseeing, and submitting claims.
Although a claim might be refused for hundreds of distinct technical reasons, the following are some of the most common reasons why medical billing claims are denied:
- Patient data, such as date of birth or date of care, that is incomplete or inaccurate.
- Billing and coding mistakes, such as charging an adult patient for a service meant for newborns.
- Inaccurate or delayed filing, also referred to as missing a payer’s claim submission date.
- Not being able to get prior permission.
- Claims Duplication.
- Dual coverage concerns, such as those that appear when a patient has worker’s compensation insurance in addition to their primary insurance.
DENIAL MANAGEMENT'S IMPORTANCE IN HEALTHCARE
Revenue is directly impacted when claims are denied. They waste labour hours, delay the receipt of incoming cash, and, in the worst situation, lead to uncompensated care.
The firm has had a 20% increase in rejections during the previous five years, and this trend has continued in the recent past.
When reserving a financially viable position, effective denial management is required. This is particularly valid in the continuing COVID-19 pandemic aftermath.
A successful denial management approach can identify the fundamental cause of a claim’s rejection. It enables businesses to implement remedial measures that could make these kinds of operations unnecessary in the future.
DENIAL MANAGEMENT FOR PRACTICES
Several best practices may be used to maintain organization and knowledge of underlying causes and ramifications. Below is a discussion of a few of these:
STAY ORGANIZED
The organization’s income will decline if it is unable to track refused claims. In addition, as the percentage of denied claims increases, your firm will deal with more challenging administrative issues.
As a result, in order to handle insurance claim denials, a structured denial management procedure utilising HIPAA-compliant methods and technologies must be established.
UNDERSTAND THE STATS
Gaining insight into the elements causing high first denial rates will enable you to identify the underlying reason of the high denial rate and offer you chances to improve processes, hence minimizing or doing away with revenue cycle issues.
TAKE PROMPT ACTION
Once a defined protocol is in place to track claims as they enter and exit the system, it will be possible to follow a tried-and-true process to get rejections resolved, ideally within a week.
IDENTIFY TRENDS
By monitoring, evaluating, and documenting patterns, rejections may be quantified and categorised. Emphasising data and analytics is crucial for locating and fixing the problems that are initially causing rejections.
In order to lower rejections and improve compliance, it’s also critical to ask doctors and payers for aid when needed and to take advantage of the knowledge of specialist denial management services.
HAVE A TEAM IN PLACE
Determine which departments have resources available, then use their expertise to build medical billing solutions so that improvements can be tracked and reported on. As a result, it will be easier to establish benchmarks, reduce backlogs, and identify the root causes of the issue.
The major players in this formidable team of specialists would come from the following departments: nursing, patient financial services, case management, admitting and registration, health information management (HIM), information technology (IT), finance, compliance, and, of course, the doctors.
LEVERAGE AUTOMATION
It would be ideal if you used robotic process automation (RPA) to automate the denial management procedures. You’ll have additional time as a result to edit the rejected claims.
COLLABORATE WITH PAYERS
A payer-provider collaboration can help in handling rejection issues more effectively since payers stand to gain from their resolution as well. This would hasten the process of achieving system efficiency.
TRACK PROGRESS
Monitoring the process will assist you in determining which parts of the denial management procedure are effective and ineffective.
In addition, it offers the chance for analysis and raises the system’s total efficacy.
As a result, your company is better able to identify the areas that need improvement and those that are succeeding.
FOCUS ON QUALITY OVER QUANTITY
Following up on claims that have already received an answer is the most efficient use of the limited resources and time available.
It will enable a greater number of high-quality claims rather than a greater number of low-quality claims that provide no results.
REGULAR AUDITS
Conduct performance audits, including examinations of write-off adjustments, zero payment claims, registration, remittance advice evaluations, and the calibre of insurance verification.
LEARN FROM MISTAKES
Make good use of the data included in electronic health records (EHRs), including payer ID lists and insurance company information. Data that was not correctly produced may be the reason a claim is denied.
As a result, it’s critical to draw lessons from past rejections. It is easier to distinguish between rejection and denial by monitoring and evaluating their patterns, which also makes it easier to pinpoint the source of issues and take quick action to fix them.
PATIENT INFORMATION VERIFICATION
Take the time to confirm patient information and insurance coverage, and use patient portals that update patient data automatically. Moreover, teach staff members to enhance data quality and notify the medical billing team of any changes to policy.
MEET DEADLINES
The filing of a claim may be impacted if the deadlines set out by the insurance company’s policies are not met.
BE FAMILIAR WITH THE CLEARINGHOUSE
Understanding the clearinghouse is crucial because building a strong rapport with it may improve operations and be advantageous to both organizations. For instance, the clearinghouse may help insurance firms by providing comprehensive justifications for rejections.
FOLLOW UP REGULARLY
Keep track of each claim so that, in the case of a planned appeal, those that are rejected or refused may be modified and resubmitted, saving money.
Conclusion
The percentage of denied claims puts a heavy burden on healthcare organizations and providers. Therefore, in order to combat financial stress and maintain a regular cash flow, practices need to concentrate on efficient denial management techniques.
You may, however, outsource your medical billing and rejection management if the entire procedure and the tactics covered in this blog seem like too much effort.
