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Avoiding denials: 5 ways to improve claims reimbursement

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Claim denials account for a staggering amount of lost revenue annually for most healthcare providers.

“Industry experts estimate that 25-30% of all healthcare claims are denied or rejected,” says Healthcare Reports, “with a typical loss of 2-6% of the facility’s net revenue each year attributed to denials.”

The loss of revenue in the case of claim denials is two-fold: first, studies show that a majority of claims denied are not appealed.  Second, providers spend thousands of dollars investigating and reworking claims that they do appeal, sometimes resulting in a statistical net-negative even when the claim is appealed successfully.

Many providers and healthcare organizations, particularly large ones, chalk this up to the cost of doing business.  But let’s face it, if you’re outcomes on appeal are a net-negative – that is to say, you’re paying more to investigate and appeal denials than the claims are worth in potential revenue – or you’re not appealing them at all, then you’re just leaving money on the table.

The best possible solution, of course, is to avoid denials altogether.

“Medical billing is challenging,” says Michelle Tohill, writing in an article for RevCycle Intelligence, “but there is no reason your practice can’t improve its reimbursement rates by minimizing claim denials and working every claim denial until it is resolved.”

Tohill, a Revenue Cycle Management expert, has 5 recommendations for managing claim denials.

  1. First, make sure your billing software is automated. “There are many software providers that will automatically update codes and requirements,” says Tohill.  In addition, automated software can help catch issues before claims are submitted.
  1. Keep you billing staff on top of any new payor requirements, coding and software updates. Staff should be continuously engaged in training and professional development to stay informed, current, and proficient.
  1. Managing your claims process is key. Ensure your staff is taking care to fill out forms accurately and, where paper forms are necessary, legibly.  Ensure procedures for checking claims for accuracy and tracking denials are set in place and understood by staff.  “A little bit of management goes a long way in minimizing claim denials,” says Tohill.
  1. Follow up on denied claims, investigate the cause, ensure staff are tracking denials and working on adjusting/correcting denied claims for resubmission as part of the daily work load.
  1. “Don’t miss deadlines,” says Tohill. “There is no recourse if you miss a deadline, and therefore the money is forever lost.”  Your practice should consider this a non-option.  Ensure staff are properly trained to meet claims deadlines.

Are you one of the 25-to-30% of medical practices experiencing lost income due to improper billing?  Would you like to achieve a 25% increase in overall collections?  Of course you would!  Rev-Ignition can help!  Call (844) 297-9944 to speak to one of our knowledgeable professionals today.