Wanting to go home to spend the holidays with your family feels only natural. The warmth of your bed and the comfort of being around people you have known for the longest time is unmatched. But recent years have pushed people to embrace change and adapt to new traditions. Similarly, healthcare organizations used to depend on in-house employees to handle claim denials, but in recent years, many organizations embraced outsourcing as a viable solution to meet their goals.
Recent studies and research show that healthcare organizations today are much more open to outsourcing operational processes for long-term goals. Market Research Future stated that healthcare executives in more than 90% of 500 hospitals and healthcare organizations are keen on exploring outsourcing options.
Proper denial management systems are important for maintaining the financial health of any organization. Narrow margins and recent staffing issues in the US have also pushed healthcare providers to look into outsourcing to reduce costs. Sourcefit reported that claim denial management systems are one of the most outsourced processes.
Contents
- Intro
- What Is Denial Management?
- What Are the Main Causes of Denials?
- Are Claim Denials Expensive?
- How to Prevent Claim Denials?
- Can Outsourcing Help?
- Strategies for Denial Resolution
- Measuring Denial Management’s Success
- Building a Denial Management Team
- Maintaining a Healthy Healthcare Organization
Wanting to go home to spend the holidays with your family feels only natural. The warmth of your bed and the comfort of being around people you have known for the longest time is unmatched. But recent years have pushed people to embrace change and adapt to new traditions. Similarly, healthcare organizations used to depend on in-house employees to handle claim denials, but in recent years, many organizations embraced outsourcing as a viable solution to meet their goals.
Recent studies and research show that healthcare organizations today are much more open to outsourcing operational processes for long-term goals. Market Research Future stated that healthcare executives in more than 90% of 500 hospitals and healthcare organizations are keen on exploring outsourcing options.
Proper denial management systems are important for maintaining the financial health of any organization. Narrow margins and recent staffing issues in the US have also pushed healthcare providers to look into outsourcing to reduce costs. Sourcefit reported that claim denial management systems are one of the most outsourced processes.
What Is Denial Management?
Let’s take a quick look at types of denials and how they can affect your organization.
- Hard Denials: This type of denial is irreversible and often ends up in written-off or lost revenue
- Soft Denials: This type of denial is temporary and can be reversed with correct information
What Are the Main Causes of Denials?
Here are a few common factors to be mindful of as they may lead to denials.
1. Minor Mistakes Can Cost You
Incorrect information in details like the insurer’s ID number or the patient’s name or other such details can result in a denial
2. Always Seek Approval for Tests
Some tests and procedures require clearance or approval from insurers. In case preauthorization is not taken for the said tests, it can get the claim denied
3. File The Claims on Time to Avoid Rejection
Each claim must be filed within a specific period to be considered for approval. Failure to do so can mean that you do not get reimbursed for it
4. Pay Extra Attention to Details
Another major reason for improper denial management in medical billing is missing or incomplete information on the form. The right medical coders and billers are familiar with ICD-10, AHIMA and ACDIS guidelines to ensure proper functioning of the process
Are Claim Denials Expensive?
Plutus Health conducted a survey of many healthcare organizations with annual revenue of about $5-25 million and an RCM team of about 50-70 people. The survey showed that the claim denial was their biggest RCM-related challenge. It also revealed how one in five organizations lost half a million dollars every year due to denied claims.
Claim denials can not only disrupt your revenue cycle but also cause delays in essential services. This starts a ripple effect causing frustration and dissatisfaction which could hurt your organization’s reputation in the industry.
How to Prevent Claim Denials?
Various industry experts share the belief that about 90% of claim denials could be avoided, presenting a significant opportunity to avoid financial loss. The following points explain what to do to effectively reduce the number of claim denials.
1. Double-Check Eligibility and Verify It
Check if prior authorization is required before moving ahead with the patient’s tests and procedures as they may not be covered by their health insurance
2. Ensure Accurate Coding and Documentation
Accurate documentation prevents unnecessary costs and is critical for medical billing and coding. Not only does it justify reimbursements, but also protects against incorrect charges for the patients
3. Introduce Timely Training and Education
Training and education help the employees be updated on all the latest developments and the intricacies of dealing with complicated billing and coding processes. The training should be specific to your organization’s needs and help take your employees’ knowledge to the next level. The right education and training help the coders and billers make fewer mistakes resulting in a lesser number of denials
Can Outsourcing for Denial Management Help?
At the beginning of the blog, we mentioned how outsourcing is increasingly becoming a top choice for streamlining processes. But is it the right answer for you? Let’s analyze how it can benefit you and your team.
1. Access to Expert Professionals
Outsourcing gives you the opportunity to collaborate with seasoned experts without incurring any additional costs like employee benefits or training. Dedicated coders and billers know the latest updates and work accordingly to manage your claim denials
2. Flexibility and Scalability
Every organization has different needs. A good outsourcing organization will cater to your needs and be flexible to accommodate your requirements. Their goal should be to sustain and grow your organization
3. Analytics and Risk Management
Data analytics and timely reporting by outsourcing organizations can go a long way in streamlining your processes and giving you a competitive advantage. It is also a great way to mitigate risks
Strategies for Denial Resolution
The set of strategies you use to manage denials can be the defining point for your organization. The following strategies make it easier to manage denials.
1. Appeal and Tracking
Examining and monitoring denied claims is crucial for recognizing patterns and addressing concerns. Utilizing this information enables enhancements to the billing process and the implementation of preventive measures against denials
2. Staff Training and Process Improvement
Providing targeted training in specific areas can help curb claim denials. It helps improve competency and ensures compliance
Measuring Denial Management’s Success
Even with proper strategies in place, it can be difficult to assess the success or failure of a denial management system. The Health Financial Management Association (HFMA) has standard metrics called MAP key KPIs that can help gauge your organization’s performance against competitors. To learn more about measuring KPIs, take a look at our detailed blog about HFMA’s KPIs.
Building a Denial Management Team
Two major factors play a significant role in building a great denial management team.
1. Assembling a Dedicated Team of Professionals
The team should be well-versed in industry regulations and possess problem-solving abilities to analyze denial trends and implement preventive measures. Additionally, collaboration with billing and coding departments should be encouraged to create a comprehensive denial management strategy
2. Delegating Roles and Responsibilities
Always remember that you are in change. To ensure the denial management team operates efficiently and successfully, delegate the tasks and ensure you receive regular updates from your outsourcing partner. You can also appoint a denial coordinator to be responsible for overlooking the whole process and making sure that all other tasks are performed correctly and on time
Maintaining a Healthy Healthcare Organization
The use of correct strategies to navigate denial management goes a long way in ensuring smooth functioning of your organization. Valerion Health is dedicated to helping healthcare providers like you enhance your processes like denial management to ensure a smooth and consistent process.
We have decades of experience in the industry and provide you with unique solutions that meet your vision. We understand that each organization faces different challenges and can help you effectively tackle them. Get in touch with us to learn more.
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