Ten tips to improve claims denial management in the revenue cycle
Denials management in healthcare refers to the process of addressing and resolving claim denials from insurance companies. When a healthcare provider submits a claim for reimbursement, many times it can get denied or rejected, often due to errors, lack of proper documentation, or issues with coverage. Denials can significantly impact a healthcare provider's revenue cycle. Effective denial management is crucial for ensuring revenue cycle efficiency and financial stability. It is also an important step in patient satisfaction. Delays in billing and insurance processing can lead to frustration for patients, impacting their overall satisfaction with care. Working through medical claims denials can be complex, but following best practices can help streamline the process. Here are some effective strategies:
Verify Patient Eligibility: Confirm that the patient’s insurance was active at the time of service and that the treatment provided was covered under their plan. Ensure that any necessary prior authorizations were obtained for projected services scheduled. If incorrect information is obtained at check in the more likelihood of rejected or denied claim due to eligibility issues or incorrect insurance being billed.
Communicate Effectively: Maintain clear communication with both the insurance company and the patient. Discuss with patients any non-covered services and patient responsibility prior to the service being performed. Obtain ABN if applicable for non-covered services. If further information needs to be sent to the insurance company, provide it promptly.
Correct Coding: Ensure that the codes used for billing (CPT, ICD-10, and modifiers) are accurate and reflect the services provided. Ensure that ICD-10 codes are coded out to the highest level of specificity. Unspecified ICD-10 codes are under much greater scrutiny by insurance payers and leads to a high level of denials. This would include reviewing all clinical documentation to ensure the billed services are supported in the clinical documentation. Incorrect coding is a frequent cause of denials.
Understand the Denial Reason: Carefully review the denial notice to understand the specific reason for the denial. Common reasons include coding errors, lack of medical necessity, or missing information, no prior authorization. Having billing denial specialists grouped by payers helps the team become more knowledgeable in relation to specific payer guidelines and requirements for billing.
Gather Documentation: Collect all necessary documentation related to the claim, including patient records, treatment notes, prior authorizations and previous correspondence with the insurer. Be sure to include any published payer guidelines to support your coding and billing of services.
Create a Standardized Process: Develop a workflow for tracking denials and appeals, including checklists and templates for common issues. This can help maintain organization and consistency.
Centralized Database: Utilize a centralized tracking system (like a software platform) to log denials and appeals. This can include fields for denial reason, date of denial, response due date, and outcome.
Status Updates: Regularly update the status of each denial and appeal, allowing for real-time tracking and follow-up.
Checklist Creation: For each common denial reason, develop a detailed checklist that outlines the necessary steps to address the issue. This may include verifying patient information, confirming insurance coverage, or ensuring proper coding.
User-Friendly Format: Ensure that the checklists are easy to read and accessible to all team members. Consider digital formats that allow for easy updates.
Team Roles: Clearly define roles and responsibilities within the denials management team. Assign specific individuals or teams to handle particular denial reasons or stages of the appeal process
Accountability: Establish accountability measures to ensure that team members are following the standardized process and adhering to deadlines.
Appeal Letters: Develop standardized templates for appeal letters that can be customized based on the specific denial reason. This will save time and ensure that all necessary information is included.
Documentation Templates: Create templates for gathering required documentation for different types of denials, such as authorization requests or medical necessity information.
Performance Metrics: Set key performance indicators (KPIs) to evaluate the effectiveness of the denials management workflow. Metrics could include turnaround time for appeals, denial rates, and success rates for appeals.
Regular Review: Schedule regular reviews of the standardized process to identify areas for improvement. Gather feedback from team members to refine checklists and templates as needed.
Appeal Timely: Be aware of the appeal deadlines set by the insurer. Timely filing and appeal deadlines can vary greatly by payer. It is recommended to compile a list of the top 10-20 payers for your organization and share those timely filing guidelines and appeal deadlines with the whole team. Submitting appeals promptly increases the chances of a favorable resolution and decreases the chance of a denial due to timelines.
Follow Up with Payers: After submitting an appeal, follow up with the insurance company to confirm receipt and to inquire about the status of the claim. Have internal procedures in place to track denial status until completion of the claim so encounters are not overlooked and become untimely denials. Building strong relationships with insurance companies can facilitate better communication and may help in resolving disputes more effectively. Participating in payer-provider forums can lead to more understanding of payer requirements and expectations.
Educate Staff: Regularly train staff on coding practices, billing procedures, and updates in insurance policies to minimize future denials. Ensure quarterly review of regulations from all major payers. Healthcare regulations and policies regularly change. Stay quickly informed about these changes is vital to avoid denials.
Analyze Trends: Regularly review denial patterns to identify recurring issues. This should be shared with not only the revenue cycle team but your providers as well. Feedback on denials and what can be done to improve documentation to support billed services is a key to denial reduction. This can help in making systemic changes to reduce future denials. This data can also be used to build edits within the billing claims system to help identify pre-bill issues related to coding or coverage for billed services.
By implementing these best practices, you can improve your chances of successfully overturning denials and ensuring timely payment for services rendered. By effectively managing denials, healthcare providers can improve their revenue cycle, reduce administrative burden and enhance patient satisfaction.
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