Efficient Ways To Reduce Claims Rejections and Denials

Rejections and denials can cause significant revenue leakage. Going by numbers, it won’t be an exaggeration to suggest that rejections and denials are plaguing healthcare.

For example, recent research on denial rates has unraveled that in just one month of 2021, $262 billion worth of claims were denied out of the total $3 trillion. That translates into $5 million on average per provider.

A survey cited by Becker’s Hospital CFO report suggests that 24% of the denials arise due to eligibility issues. Another study by the American Medical Association put the cost of insurance follow-up for registration issues at a little under $19 per claim. So, if a practice can reduce the eligibility denial count by five each day, it can reduce its administrative costs by $100.

The numbers are serious, and practices have to take them seriously too. The keyword to do so is prevention. When a claim reaches denied status, the practice has already lost fifteen days, and time is money when it comes to healthcare. A doctor performs a service, say on the first of the month, but the money will take approximately 30 days to reach the accounts receivable. Denial or rejection after that long is not pleasing.

Provider services are different from other businesses. If we go out to shop from a store, we are expected to pay before leaving. Cable companies want their money in advance; otherwise, they will shut the cable. Healthcare providers cannot cut the service because it is already provided. You would want those claims settled because they are critical for your practice to survive.

Verify Eligibility

24% of the total denials are due to eligibility issues. If you have a patient coming to you for years, your priority should be eligibility verification because people change their jobs and sometimes their plans too. Practices have to ensure that whosoever enters the door has coverage that has not been terminated, and benefits are not maxed out.

The staff has to be competent enough to know the plans you accept, interpret the policies, and be confident enough to discuss coverage with patients.

Collect Complete Information

One error can throw your claim in a different direction. Know that even one blank field can trigger a denial when filing claims. Fill in the accurate and correct information. Wrong plan codes and incorrect social security numbers are responsible for 61% of medical billing denials and 42% of denial write-offs.

Complete and relevant information is critical. Some details that seem mundane can cost you big money. Give special attention to details like name, date of birth, insurance payer, policy number, etc.

Share The Denial Statistics.

Learning from your previous mistakes can help you avoid them in the future. Practices should make it a point to discuss the denials in discussions during the team meetings. Sharing claim rejections and denials rates and knowing the reason behind each can itself set a goal for improvement.

An open flow of such information within your organization can help your staff differentiate between denials and rejections. It will also make it easy for your team to learn how the problem occurred and how to rectify it for future processes.

Avoid The ‘I’ll Do It Later’ Attitude.

Deadlines are a part of most systems, and insurance is no exception. Healthcare companies, too, must follow the deadlines as per the timeline mandated by the insurance companies.

If your practice cannot follow the timeline, it will affect your claim filing. Therefore, make it a point to file the claims before the filing limits. Timely submitted claims are usually done without haste, and you can then pay extra attention to HCPCS and CPT codes.

Utilize Technology

Many practices are unable to utilize or implement practice management systems. Some find them expensive and time-consuming. But it does not mean that practice should not take advantage of what the technology offers. For example, having a database at your disposal is way faster than pulling patient folders from cluttered file cabinets.

Systems are available with built-in edits to review the claims before sending them out for final submission. Such systems can flag the staff and push them to edit and review the claims until they do it right.

Save Time And Money- Outsource

Managing claims and reducing the denial or rejection rate can be daunting. In addition, you will have to spend a reasonable amount of time and resources on people and technology to help you take up this process. That is why outsourcing the process is still the best alternative available to practices.

Outsourcing is not only cost-effective but efficient too. For example, healthcare billing companies have denial management services wherein dedicated professionals will interact with insurance companies to know the reasons for denials and make amends, which can, in turn, boost the revenue cycle management healthcare process.