Did you know that many healthcare organizations lose a substantial chunk of revenue due to payment denials? Claim denials are an undeniable fact of the healthcare industry, but organizations must have effective denial management in place to keep the denial rate low. Well-performing practices typically experience denial rates under 5% while other practices face denied claim rates ranging from 10 to even 30%. The numbers add up, amounting to significant lost revenue.
Healthcare practices must have robust denial management to maintain healthy cash flow as part of their overall revenue cycle management strategy. Denial management must investigate every unpaid claim and appeal rejections appropriately, as per the process detailed in the provider contract.
So, what can you do to fortify your denial management and minimize your denial rate? Let’s take a look at a few tips that can help improve your denial management.
Identify Trends
With some analysis, you will probably identify certain denials that are most common to your healthcare practice. Measuring the number and frequency of denied claims will identify the trends unique to your practice. This insight can shed light on specific problems or areas that need to be improved, and by eliminating this type of recurring denial your practice will see a significant improvement in revenue. In other words, while certain denials might seem minor, looking a little closer can uncover patterns that point to a larger issue. By remedying such issues, there is much to be gained through cash flow and revenue improvements.
One Week Processing
Timeliness is an essential quality in denial management. Your practice should have processes in place so that each denial is processed within a week. One week processing helps create a strong workflow for denied claims. This is essential to creating a more effective system.
Track Progress
Visibility is the key to being well-informed and making decisions to improve denial management. Tracking is essential to this visibility; by keeping track of the progress and success of your denial management process, you will get a clear picture of what’s working well and what isn’t. The next step is to identify process improvements and implement them to prevent future denials. Tracking requires clear documentation of all wins and losses for unpaid claims. By leveraging this data, you can greatly improve the efficiency of your denial management strategy.
Incentive Programs
Implementing an incentive program can be a good strategy to motivate employees, sparking a little healthy competition. With the desire to perform better and win incentives, employees can play an important role in identifying trends, sharing best practices and successfully appealing denials.
Effective denial management has a number of benefits for healthcare practices. Some of the primary benefits include:
- Identification of root causes for denials allows solutions to be formulated for specific categories.
- Cash flow is maximized as denials are minimized.
- Identification of possible business process improvements that will avoid future denials.
- Clear analysis of the effectiveness of denial resolutions.
- Timely tracking and appeal of denials with appropriate prioritization.
- Accurate reports that support management in decision-making to prevent denials in the future.
While many practices typically have an in-house denial management team, partnering with an experienced denial management partner can slash your denial rates. Aside from denial management services, many healthcare service partners provide extensive services in revenue cycle management that can prove extremely effective. They typically have specialized teams with expertise in handling the complexities and nuances of the insurance system. Your practice can focus on its primary purpose of providing healthcare while expert hands take care of improving denial management.
If you’re interested in improving your denial management but aren’t sure where to begin, Allyhealth would be glad to help. With Allyhealth as your trusted ally in healthcare services, you can rest assured that your denial management and revenue cycle tasks are in skilled hands. Get in touch with us to find out more about our services.