When maintaining a healthy practice, it’s imperative to keep abreast of the inner workings of your office to ensure it’s running at optimum speed. One area that many providers lose consistent revenue is in their denials. Unfortunately, once a claim has been denied it only has a 35% chance of being reworked to recapture the reimbursement1, so having an actionable set of steps to help prevent denials from happening is imperative to running a healthy business.

Preventing denials is a two-part system that works hand in hand – your front of house intake and your back of house billing. When you have knowledgeable and informative staff that manages your co-pays, insurance eligibility, and patient demographics it ensures the correct information is in your back of house billing system to run a claim through successfully. As a vitally important part of your practice, what are some steps your office managers and front of house intake specialists can take to make sure you don’t have money walking out the door?

Be vigilant about clean registrations

What does this mean? It means that as a business owner you must empower your staff to make corrections and ask more than “Has anything changed in your insurance since the last time we saw you?” When your employees are knowledgeable about the full life cycle of a claim and all of the information that is needed to process a claim successfully it helps your entire staff take ownership of their piece of the puzzle. Engaged and active employees also create satisfied patients who are confident in the office they have chosen to do business with.

Check Eligibility

It’s also essential to ensure the clinician providing care is contracted and credentialed with the exact insurance product the patient is covered by. “Most practices don’t even know precisely who they’re contracted with,” Penny Noyes, president and CEO of Health Business Navigators says. “They’re pretty confident they’re with the Blues, Aetna, et cetera, but they don’t know for sure if they’re in the HMO, PPO, Medicare Advantage, or private Medicaid products.”

Noyes recommends practices conduct a periodic review to confirm which products each clinician in the practice is linked to. It’s time well spent, regardless of how long it takes. In a small practice, this information can be gathered through one or two phone calls to each payer, she says.

Considering that 90 percent of denials are preventable, most practices can become top performers — not just for bragging rights, but also for the opportunity to gain significant revenue and increase their bottom line while reducing their bad debt.

Ascertain Financial Responsibility

One of the most important tools you can arm your front of the house staff with is a prequalification and estimation tool. When you give your patients an estimate of what their treatment will cost it gives them the ability to plan and budget for the expense. It also increases your patient-practice loyalty because not only are you keeping your own bottom line in check, you show care and concern about your patient’s well-being outside the confines of your office.

In tandem with a prequalification and estimation tool, giving your patients the ability to pay over time gives them more control over their finances and lowers the chance of your patients not paying their bill at all. Through our HonorCare program we have found that giving patients a payment that works on their timeline and within their budget increases the practice’s likelihood of being paid. While it may take longer for your patients to reach a zero balance, bringing some money in over a long period of time is better than not getting any money at all and having to write that patient bill off to bad debt.

Week after week we see healthcare facilities closing their doors or opening themselves up to a corporate buyout due to bad debt or outdated practices. Maintaining a healthy revenue cycle is vital to a growing and expanding healthcare organization, as well as ensuring your patients are satisfied. The key is to be knowledgeable as to what your company needs, what your patients desire, and how your staff is handling the inner workings of your practice. If you take the time to find out what tools could help your staff do their job with increased productivity, you could help your practice become more profitable.

Out of the $262 billion denied claims submitted by health organizations last year, 90% of them were avoidable. You’ll see a lot of other writers call that 90% “hidden revenue”, but it’s not really hidden, is it? It’s easy money. At least it is if you have the right solutions in place. Fortunately, many pieces can become automated but there is also a need for collaboration if you expect to drastically improve your organization’s denial rate. Here are a few hacks you should be using right now!

Confirm coverage automatically.

It comes as no surprise that insurance eligibility is the most common type of denied claim. Sometimes a patient’s insurance lapses, or the patient switched policies without informing their provider. Other times, a patient may not be aware of exactly what their insurance will cover and not cover. There are automated solutions for revenue cycle management, like ImagineDiscovery™, that discover patient insurance coverage that can be applied to a patient visit for payment. So, you’re capturing revenue upfront - even before the patient’s visit - making the payment process easier for the patient and reducing your denial rate (which we will discuss in more detail in this blog post.)

You do the math!

There are a few simple numbers and formulas you should have on hand if you want to discover the root(s) of the problem:

• Rate of appeals- There’s a healthy balance between appealing no denials and appealing so many that you’re potentially wasting money that should be spent on prevention. On average, the best rate of appeal is between 85% and 88%. If you’re appealing over 90%, you’re fighting too many. If your rate is low, you’re not communicating enough with your payors.
• Denial rate- Which is the percentage of claims denied by payors. The denials rate is calculated by total dollar amount of claims denied by payers within a given period divided by the total dollar amount of claims submitted within the given period. This metric quantifies the effectiveness of your revenue cycle management. If your denial rate is low, it indicates a healthy cash flow, which means fewer staff members are needed to maintain that number. The industry average is between 5% and 10%, so if you can attain a rate below 5%, you’re in really good shape.
• Average Reimbursement Rate- Which is the average amount your practice collects from total claims submitted. The higher your percentage, the better revenue will be. The industry average is between 35% and 40%. When tracked over time and compared to historical results, you really get an idea of how the practice is performing financially.

Collaborate and make it personal.

You should involve as many departments as possible in the process of managing denials and discovering root problems, perhaps even developing a team to oversee process improvements. However, you will undoubtedly struggle to get a buy-in from employees unless you make it personal to them. At Maricopa Integrated Health System (MIHS), denials are communicated to employees on a monthly basis by reason code and financial impact to each individual department. This way, each department feels a sense of ownership and understands the part they play in reducing denials. Keep this in mind: when it comes to sharing these insights, it’s important to be more collaborative so that colleagues won’t fear that they will be blamed as a root cause. If employees fear repercussion, you won’t receive the cooperation needed to solve the problems that are causing denials. Include enough information to put numbers into perspective, instilling trust instead of fear.

Make claims generation and submission hands-free.

We’re human, so naturally we can’t do it all when it comes to medical billing. If your revenue cycle is built on manual data entry, there’s a lot of room for error. With thousands of diagnostic codes, insurance policy requirements, payer rules and changing regulations, it can be exhausting for staff to accurately keep up. Plus, many providers lack the staff or expertise needed to manage denials effectively. Revenue cycle management software solutions like ImagineAppliance^®automate general file transfer, charge coding, checking against payer rules and submitting for payment with automated timers and natural language processing. Automating the claim lifecycle gives you much more functionality as a department and shifts billing staff responsibility into reviewing claims instead of manual creation, saving staff time and automatically creating clean claims.

Get your claims out quicker to keep payments coming in.

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Capture accurate patient information with artificial intelligence.

The majority of denials are caused by manual error. The single most important task a receptionist can perform to reduce denials is to capture the correct insurance and demographic information upfront, but often times that’s not easy. Denials based on this type of incorrect information are high-probability candidates for write-offs because the effort to re-work them often drags on past the filing deadline. Giving your front desk staff the tools they need to capture that information upfront, like ImagineAI™, will allow them to verify and correct patient demographic details immediately. This will streamline your patient collections process while ensuring that your practice is producing more clean claims.

Originally published May 7, 2019

Managing claims can be a challenging process for any healthcare provider, no matter the size. Even the largest health systems with experienced coders experience denied claims. That’s why it’s essential for physician practices that want to maintain a strong revenue cycle to implement a comprehensive denial management strategy.

Denial Management Definition

An often-used definition of denial management comes from healthinsurance.org: “the refusal of an insurance company or carrier to honor a request by an individual (or his or her provider) to pay for health care services obtained from a health care professional.” Forms of denials include “soft denials” or a temporary denial that goes not require an appeal and could still be paid if the followed up on, and “hard denials” or a denial that could result in lost revenue if not appealed.

While an estimated 67 percent of denied claims are appealable, as many as 65 percent are not reworked because the time and expense of reworking the denials manually would be more than the revenue they could generate.

When you’re processing hundreds or even thousands of complex medical claims every week, a small percentage of denied claims can have a significant impact on your bottom line. Physician practices that don’t employ denial management in medical billing essentially forego revenue they’re due.

According to the American Medical Association (AMA), 1.38-5.07 percent of claims are denied by payers on the first submission. Commercial and public payers deny about one in every 10 submitted claims. Half of denials are caused by front-end revenue cycle issues.

Whether claims are denied due to missing or incorrect data, lack of documentation, procedure coding errors or other common reasons, they can’t be resubmitted. They have to be corrected based on the reason declined.

Importance of an Automated Denial Management Strategy

Unlike claim rejection, which occurs when a claim is submitted to a payer with incorrect or missing data or coding, claim denial happens when a claim is processed and then denied by a payer. The purpose of claims denial management is to investigate every unpaid claim, uncover a trend by one or several insurance carriers and appeal the rejection appropriately.

For additional information on this topic, download our white paper, “Reasons for Medical Billing Denials and Actions to Avoid Them.”

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The best solutions for denial management in medical billing are those which catch a mistake before it occurs. For larger healthcare organizations, the sheer volume of claims requires more than a manual process.

Automated denial management can help bridge the gap between claim denials and higher profit for healthcare providers. Conversely, physician practices utilizing an outdated billing system risk an increased failure to collect copays, overly complex claims processes and unnecessary errors. They also have an increased potential for inaccuracy and ineligibility.

Automated claims management solutions are regularly updated with codes and can be used to route denied claims directly into work lists. They also offer decision support to enhance denial management workflow and mitigate the need for practice staff to spend multiple hours manually processing claims.

Automation fits into a well-tuned denial management strategy at three-phases: pre-and post-denial and advanced reporting.

Automating the Denial Management Workflow

Joseph Gesser is the Director of Technology Solutions for Pollux Systems Inc, a multi-specialty billing company and ImagineSoftware client of five years. In comparison to billing companies that bill for one specialty, Pollux Systems bills for specialties that have very different coding and billing requirements, so utilizing a medical billing software solution that has the ability to interface with all of them effectively is key.

"We've been able to increase our interface capabilities with our clients to automate certain features, as well as increase our ability to work denials automatically and be more effective on the collections cycle."

According to a 2016 HIMSS survey, nearly a third of providers are still using manual claims denial processes. Out of the 69% using an automated denial management solution, 44% use a vendor and 18% manage their own system in-house. The best solutions to common medical billing mistakes are those which catch a mistake before they occur. For larger healthcare organizations, the sheer volume of claims requires more than a manual process. Automation fits into a well-tuned denial management strategy at three-phases: pre-denial, post-denial, and advanced reporting:

Pre-denial Management

Start by putting the necessary processes and technology in place to ensure all anticipated causes of denials are accounted for and segmented into the correct course of action to be resolved. This can be accomplished by:

• Correcting errors from duplicate billing, incorrect CPT modifiers and inaccurate patient demographic information. Reconcile missing patient information with existing records. An automated tool like ImagineAI^TM verifies and corrects patient demographic details immediately.
• Getting insurance authorization for healthcare services that require prior approval. Systems that conduct pre-authorization services can complete this in minutes instead of hours like that for manual processes.
• Verifying insurance eligibility, the most common type of denied claim. Use a tool that identifies coverage opportunities, including overlooked alternative payment methods.

Post-denial Management

Recover hidden revenue and minimize the impact of denials by top causes and sources of denials. Solutions such as ImagineIntelligence^TM enable physician practices to:

• Automatically sort by dollar amount from greatest to least and/or date of service to head off filing any late claim denials, a process that can take hours, if not days, to complete manually.
• Systematically assess the business impact of each kind of denial and prioritize denials that represent the greatest opportunity for quick revenue recovery.
• Implement a system where claims with the same payer and cause of denial are appealed in bulk.
• Isolate complex bills into a separate bucket to be reviewed by a trained billing manager.

Advanced Reporting

High-level data analytics can help determine if you do not have enough people working on denials and identify problems within your denial management processes. Use these analytics to:

• Conduct “root cause analysis” to pinpoint trends in denials.
• Share insights with front-end and middle-stage revenue cycle teams about the reason(s) for denials. This can help reduce the flow of denials and address issues further upstream. For example, if a significant portion of your denials are prior-authorization denials, review your front-end authorization process.
• Establish benchmarks, analyze workflow performance and track staff productivity related to denied claims. Reviewing automatically created clean claim and denial rates with your employees can open silos and identify new opportunities for collaboration.

ImagineSoftware’s claims management solutions enable physician practices to get claims out more quickly to expedite reimbursement. We offer an average of 35 days in A/R and a 97% net collections rate. For additional information on this topic, download our white paper, “Reasons for Medical Billing Denials and Actions to Avoid Them.”

Reasons for Medical Billing Denials and Actions to Avoid Them

Claim denials management is challenging, to say the least. Is it truly just a casualty of the billing war or something more complex? In this white paper, we will go in-depth on the most common reasons for medical billing denials, the difference between a denied claim and rejected claim, including some steps you can take to avoid them next time you file an insurance claim.

“Denials management” conjures up several ideas: a software we should be using, a term we espouse in meetings, something to put on our resume, and something we’re supposed to be managing. But are you doing denial management effectively? How do you define “effective?” And how can you reduce claims denials in any meaningful way?

What is Denial Management?

The term “denials management” came into favor as billing systems garnered more horsepower—we suddenly had the benefit of real-time views of our billing offices with the ability to see denials now—rather than a month after we posted them. We suddenly had useful information at our fingertips but at times, have struggled with what to do with this information.

As an industry, we have had a somewhat difficult time in defining benchmarks for what is an acceptable denial rate. Comparing a primary care office with a radiology practice holds little value—a primary care practice should have fewer denials since they control the information from the time the patient enters the practice. Hospital-based specialties, on the other hand, are at the mercy of whomever sends them the information which can run the gamut of “not bad” to “did you actually see this patient?!”

The trick in defining the problem has gotten much easier, thanks to sophisticated billing software. But the solution still lies in managing the people and the processes. When pinning down a manager with their denial management program, it’s not unusual to hear about their appeal letters. That is indeed part of the solution, but you can (and should) do much more.

How to Improve Denial Management

When setting goals for how to improve denial management, strive to achieve these goals:

• Reduce denials
  • There is much that has assisted this effort with both billing software and the use of value-added clearinghouses. They both trigger alerts that your claim is stuck for a needed piece of information. This has greatly reduced the back-end denials seen in A/R follow-up and payment posting.
  • Root cause correction -- forming a task force with the hospital, for instance, to reduce prior authorization denials or create a team with your billing office and imaging center employees to modify processes to reduce eligibility denials.
• Improve follow-up processes
  • Employ purpose follow-up
  • Work for efficiency gains
• Identify compliance risks
• Improve profitability

List of Denial Codes in Medical Billing

The above goals have the mission-critical task of defining the problem. But when you run your denials report, you may be met with a list of denial codes in medical billing referred to as “ANSI codes.” These codes refer to many the same thing using different terms. While it’s nice to have the specific reason straight from the horse’s mouth, it’s not the best for managing the process. Specific? Yes. Efficient? No. More on that in a minute… If you comb through ANSI codes, you can find these fun ways to define a “duplicate” denial:

• 18: Duplicate claim/service
• 23: Payment adjusted because charges have been paid by another payer (may not look like a duplicate denial, but it is.)
• 57: Payment denied/reduced because the payer deems the information submitted does not support this level of service may have been provided in a previous payment
• B13: Previously paid. Payment for this claim/service may have been provided in a previous payment

...and duplicates are an easy one. just wait until you see all of the ways to decipher coding denials.

Medicare Claim Denial Reasons

To get a handle on Medicare claim denials reasons, think of your denials as falling into two general classifications: compliance or administrative, followed by your “grouping” categories. If you are an Imagine user, you can map your ANSI codes to either one of these categories, where you can begin to actually “manage” your denials.

Compliance denials are those that put the practice at risk, either for direct compliance problems or as claims submissions that could be perceived as compliance problems by Medicare—and in that case, perception is reality. Compliance denials include the following categories:

• Coding (including bundling/unbundling)
• Medical necessity
• Duplicate claims (Medicare considers “excessive” duplicates as a compliance trigger. While they have unhelpfully not defined “excessive”, use caution when auto-rebilling claims. It would be best to turn off that feature for Medicare patients.)

Administrative denials are where you can really make a difference for your practice—these are usually due to process errors or omissions and are theoretically preventable, although hospital-based practices must do extra leg work in partnership with their hospitals to truly prevent these.

• Eligibility
• Missing/incorrect information
• Prior authorization
• Timely filing
• Non-covered service
• Denied-no reason given

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What Are Some Possible Solutions to a Denied Claim?

Using the grouping feature makes denials truly easier to manage. For instance, you can turn your coder loose in the denials tickler by filtering all the coding denials and working through them without other denials getting in the way. It can also help with manual payment posting for the EOBs that do not specifically list the ANSI code and just give a generic denial—they do not have to search for an applicable ANSI code to post the payment.

Now once you have a handle on your denials, it is easier to begin the work of managing them. Root cause identification can lead you to physician dictation issues, a problem of referring physician not giving complete orders, an ineffective coder and hang-ups in the system getting claims out the door, to name a few. Use of Business Intelligence software can also help to drill down your coding category or timely filing—is one facility creating timely filing violations?

The process of managing your denials is doable and necessary. Effective denials management include smart system set-up, defining the problem, addressing root causes and yes…sending out appeal letters. There are nuances to each denial category and many more pages that could be written about the actual processes involved in successful appeals, but once you have defined the problem, you are halfway there.

source: http://www.x12.org/codes/claim-adjustment-reason-codes/