In medical billing, claim denials can not only negatively impact your organization’s revenue, but can also affect efficiency due to the time spent reworking or appealing the denials. Reworking a claim costs an average of $25 per claim, and success rates can vary. Currently, the industry average best practices denial rate is around 4%.
Denial management is the process of figuring out why claims are denied, determining the best way to lower the denial rate, and implementing strategies to increase clean claims. There are two types of denials: hard denials, which cannot be reworked or corrected and must be written off, and soft denials, which can be corrected if the claim is reworked.
The top five denials you should watch out for include:
- Missing Information
- Billing incorrect payers
- Time filing
- Duplicate claims
- Coding issues
It is important to ensure that claims go out to payers cleanly in order to be processed and paid promptly. Below are some tips to help proactively ensure your claims are received and processed in a timely manner.
- Consistently check and verify eligibility, not just at the first visit. Educate staff on the importance of pre-registration, checking authorization and/or referral requirements and correct data entry of all information.
- Be aware of payer time filing limits and bill out charges promptly. Prioritize denials by payer to ensure rejected claims are followed up on in a timely manner.
- Make sure staff is knowledgeable in determining the true reasons for the denials. Consistently rebilling claims will only result in more denials, more cost associated with rebilling and more lost revenue.
- Take advantage of billing system and clearinghouse edits, online tools such as national and local coverage determinations, payer websites and template letters for appeals. Make sure these tools are always up to date with the current guidelines and requirements.
- Develop a system to track and analyze trends in denials. Once a trend is identified, develop a process to efficiently resolve current and possible future denials.
Claims denials are one of the most significant challenges for medical billers and can have a negative impact on the revenue cycle. By proactively implementing processes that will help in submitting clean claims and following up on denied claims, as well as continuously educating staff, it is possible to reduce the number of denials and increase overall revenue.
Jan Lasker is a Billing Manager at MMG. In that capacity, she oversees an experienced team that executes revenue cycle management activity on behalf of various MMG clients. MMG is a national provider of consulting services and back office administrative support to independent and system owned physician practice groups. Additionally, MMG has been formally recognized as a multi-year Northeast Ohio Top Workplaces award winner.