For healthcare organizations, revenue cycle management refers to the process that a healthcare facility undergoes to obtain a patient, bill them for services, and collect final payments for the services provided. Because many people rely on insurance, healthcare providers must submit claims to insurance providers, making this process a vital part of revenue cycle management to facilitate payment.
Unfortunately, when claims are denied and insurance companies reject payment, the payment cycle is disrupted, which can result in revenue losses and increased administrative work. It can also negatively impact a patient’s overall experience, leading to poor reviews and a decline in new patients. Claim denials significantly impact revenue cycle management and can affect overall profitability, which is why denial management in healthcare is crucial.
What Went Wrong? Understanding Claim Rejections
You can’t fix or improve upon what you don’t know you’re doing wrong. To reduce claim rejections, healthcare facilities must adopt a proactive approach to analyzing their performance and be willing to implement necessary improvements. To achieve this, they must identify the problem to understand why claims are being rejected, enabling better denial management in healthcare institutions.
Typically, there are two types of rejections: correctable denials, commonly referred to as soft denials, and irreversible denials, known as hard denials. For example, a hard denial occurs when a service is not covered under any circumstances, whereas a soft denial may result from a minor billing or transcription error.
Common Reasons For Denials
Duplicate claims, out-of-network providers, prior authorization, and missing or incorrect information are some common reasons claims are denied. Claims could also be denied because the insurance provider doesn’t believe the patient met the medical necessity for a procedure.
While there is a laundry list of reasons why a claim might be denied, they should all be addressed with importance because ignoring them leads to lost revenues and delays the completion of the revenue management cycle. Denials for these reasons are frustrating for patients and their medical teams, and healthcare administrators should take special care to improve denial management in healthcare.
Strategies to Reduce Rejections
Effective denial management in healthcare facilities results in fewer rejections and faster payment of claims. You can achieve this at your facility by ensuring that staff are adequately trained and skilled in navigating complex billing and coding processes.
1. Improve Patient Data Accuracy
Human error exists, and it can’t be eliminated. However, regular training with an emphasis on obtaining accurate information at registration can help staff perform their jobs more effectively. Additionally, incorporating automation tools can accelerate processing and improve accuracy, leading to better overall approval odds.
2. Verify Insurance Eligibility Upfront
Part of obtaining a patient’s accurate personal information should include gathering all relevant information, including insurance details, and providing real-time eligibility checks. This eliminates the need to bill for services that won’t be covered and allows payer-specific rules to be well-known and documented, rather than discovered at a later, inconvenient time when an error occurs in the billing process.
3. Ensure Proper Coding and Documentation
Improperly coded procedures are often rejected, and facilities can improve their denial management in healthcare by being vigilant for them. Conducting regular audits to catch error patterns and pain points is necessary. From there, implementing a training program to address issues and ensure staff are current with coding changes is crucial for professional development and consistency. Finally, staff should know how to properly resubmit incorrect codes, which can help improve denial rates.
4. Implement Pre-Authorization Protocols
Again, staff training is the key to better denial rates. It is imperative to ensure they are aware of all services that require prior authorization, so they can obtain approval before services are rendered. Additionally, knowing the time to pay, timelines in overall revenue cycle management, and understanding time to approval can help increase approval rates.
Accelerating Reimbursements
Addressing issues that could lead to denials before they occur is the first step in accelerating reimbursements. However, improving the process from the outset can also help increase the speed at which claims are paid. Healthcare facilities can take charge of accelerating reimbursements by taking accountability for their part when it comes to timely submissions.
Making sure that all staff are properly trained, know processes, have access to the right tools and technology, and that they know how to use them, is a great way to reduce denials and improve reimbursement rates. Having the data to back up improvement plans is a great way to get everyone on the same page and facilitate a positive learning environment for strategy for improvement.
Leveraging Denial Analytics
Obtaining data on your claims, including the speed of reimbursement and the frequency of rejections, is crucial for identifying areas for improvement. Using revenue cycle management software like iNsight can help you collect the data you need to make better decisions and offer visual representations in charts and graphs for a more thorough understanding.
Ultimately, you can use denial analytics to identify patterns, including particular payers who routinely reject claims, and more, to determine key areas for performance improvement. Additionally, the data can help you provide better feedback for process improvement and assist in choosing the best and most profitable areas of your practice.
Empower Your Healthcare Facility
Get reimbursed faster and with fewer denials by incorporating revenue cycle professionals and software. Credence Global Solutions offers both the software you need to operate more smoothly and to get the data you need to improve your claims strategically, as well as the billing and coding professionals and BPO services that can help you get the job done right the first time. Interested in utilizing either of these services to empower your team to improve denial management in your healthcare organization? Contact us today!
