The failure of healthcare organizations to develop a well-defined approach to execute denial management services creates major leakages in the revenue generation funnels. According to studies, denied claims have resulted in about a 5% loss in a hospital’s net revenue.
Additional factors such as diverse payer rules, inaccurate information, manual processes continue to increase instances of denied claims. In view of these mounting challenges, denial management companies have devised and implemented industry-standard best practices to streamline their services.
Here’s a look at the top best practices that all denial management companies must follow:
Create and take a well-defined approach
A well-organized approach creates a consistent process flow that ensures that all the procedures pertinent to appealing and pursuing denied claims are executed meticulously.
For instance, the lack of follow-up on denied claims has resulted in several lost revenue opportunities for hospitals. This results in denied claims files piling up that later becomes a difficult task to update.
Adopting a well-defined approach includes leveraging the appropriate tools to pursue old denied claims and to keep track of the new claim files. This is one of the essential best practices that all denial management companies must follow as a start.
Reconfigure denial management KPIs
Denial management companies are advised to leverage business analytics to identify and create claims denial management KPIs separately for soft and hard denials. This aids in the analysis of denial reasons separately that reveals specific areas which require improvisation.
Separate claim denial management KPIs must be created for each payer as they have their unique sets of claims and reimbursements guidelines. This will be instrumental in determining the denial frequency caused by the individual payers and also help to prioritize the addressing of each such denied claim.
Denial management team must comprise clinical staffs
The inclusion of staff with clinical backgrounds in denial management teams will help in tackling clinical documentation issues. These issues are triggered by the implementation of new diagnostic codebooks such as the ICD-10 codebook, thereby reducing the chances of denied claims.
A multidisciplinary team with an ideal mix of medical professionals and revenue management experts drives a better understanding of clinical documentation issues. This will help denial management companies review denied claims without relying on physicians unless the reason for the denial is serious.
Better TAT for denied claims processing
A robust workflow must be followed to note and track claims as soon as they are received in systems. This is a critical denial management best practice as appealing for denied claims is restricted by a specific deadline. Following this best practice will ultimately aid denial management companies to minimize the TAT for processing denied claims.
Eligibility checking automation
Implementing redundant ways of checking patient insurance eligibility such as last-minute calls to payers prior to patient appointments have often resulted in denied claims. This can be addressed by leveraging a low-cost software that automates tasks such as pre-scheduling the insurance eligibility process. This brings more organization to the denial management services framework and leads to a sharp decline in the number of denied claims.
Services of denial management companies are an important cog in the hospital revenue cycle management process. Regulatory dynamism, the turbulent socio-economic scenario will continue to impact the prospect of revenue generation for hospitals. Thereby it is necessary that the denial management service framework is based on industry best practices that echo the current industry conditions.