In the field of medical billing, denied claims are a constant threat to your bottom line.
Some healthcare management professionals have estimated that out of the $3 trillion in hospital medical claims that were submitted in 2016, roughly $262 billion worth of claims were denied by insurance providers. The dollar amount of denied claims for smaller practices is likely just as large. It is likely those numbers have increased since then. That said, careful and organized follow-up can recover and/or eliminate most of your denied claims.
If an office wishes to accelerate their cash flow while reducing administrative costs, they need to reduce their amount of denied claims. Successful appeals of denied claims consume time and add increased costs to the practice. By having to take the time to rework and resubmit a denied claim, your billing staff is pulled away from submitting new claims.
The goal is to figure out what is creating the denied claims in the first place. Practices will never optimize their revenue cycle and will suffer from ongoing revenue leaking unless this problem is solved.
1. Insurance Coverage
Sometimes denials are generated because there may be a problem with a patient’s insurance benefits. Deductibles, secondary vs. primary insurance and copayments can all affect the status of a claim. Missing prior authorizations for the medical procedure or if the health professional is out-of-network can also create problems. Health professionals need to know the specific details of the patients insurance coverage.
The remedy for this situation is to always verify the patient demographics and insurance coverage. It is also important to ensure the information is correctly entered into the billing system. An oversight in these basic actions will increase your denials. Additionally, all patient’s information should be monitored for any changes by the front desk.
Many healthcare providers work to minimize denied claims to maximize revenue but often overlook the importance of obtaining and recording accurate information at the start of the billing cycle.
2. Closely Track Accounts Receivable
A facility’s accounts receivable should be monitored and reviewed every day. The system should have a consistent flow of claims, with blockages and bottlenecks eliminated. Verify that claims have been received and what amounts are on the aging report. When a claim has been in the system for 60 days, a direct phone call to the insurance payer is needed. This is done to check the status of the claims while also recording the claim number and date of expected payment. This verification process is essential to make sure claims are not forgotten and eventually written-off. If informed that the claim has been paid healthcare providers should record the date of payment, check/transaction number as well as the amount paid. If a check was issued, verify the mailing address and whether it was cashed. Naturally, appeal any claim that was unexpectedly denied.
I have found that consistency over time is what will create a level of optimization in a practice. Reducing denied claims and optimizing revenue is not a sprint, it is a marathon.
The money is there, you earned it, now make sure you get it!