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Reduce Medical Claim Denials AIMA revenue cycle management

Reduce denials to maximize revenue with AIMA, the healthcare revenue cycle management experts. Save dollars and time to stamp out denied claims.

Medical claim denials are on an upward trend, negatively impacting the bottom line of healthcare providers. Proactive steps to reduce denials are crucial to maximizing revenue by improving your claims management process.

Medical billing is a complex process, so billing errors are not uncommon. When they do, acting quickly to mitigate the damage and avoid further issues is imperative. The revenue cycle management industry in healthcare has exploded from $5 billion in 2011 to over $89 billion in 2023. It’s thought that over 80% of denials are potentially avoidable. Just think of the dollars, time, and potential savings that represents. By addressing issues at the beginning of the revenue cycle, practices can potentially prevent lost revenue and save staff hours.

Why are denials increasing?

Healthcare providers, including solo and group physician practices, surgical centers, laboratories, healthcare groups, urgent and in-patient treatment centers, and large-scale health systems, face four primary internal challenges that lead to denials:

Lack of resources: The revenue cycle management team does not have clinical experience to support appeals or manage clinical denials.

Staff attrition and training: Today’s competitive market makes hiring and retaining qualified staff challenging. Complex and increasing clinical denials necessitate comprehensive education and training.

Increasing denial backlog: The above staffing challenges increase denial backlogs and affect filing deadlines. In turn, the absence of denial prevention strategies and only addressing denial symptoms, not causes, results in continuous denial challenges.

Substandard technology: The lack of workflow optimization and automation for clinical documentation and inadequate investment in analytics and artificial intelligence (AI) compared to payers compounds the issues related to evolving regulatory changes.

How to reduce denials

The good news for healthcare providers is that most denials can be avoided if the above challenges are addressed. The bad news is that if claims are not addressed, the average cost to rework a claim is over $25, which quickly adds up.

The first step in preventing denials is analyzing errors and the associated slowdowns. Armed with this knowledge, practices can begin to prevent and manage denials more strategically. This can be done by focusing on six key areas:

REGISTRATION/ELIGIBILITY

Often patients don’t fully understand their health insurance coverage, or they don’t supply the necessary details about their coverage. That’s why front office staff needs to be trained to inquire about additional coverage. They should also confirm eligibility using technology, before service, at the time of service, and before submitting a claim. Registration data should be examined for accuracy, completeness, and consistency, and any mistakes should be remedied as part of the typical workflow to avert downstream denials.

AUTHORIZATION/PRE-CERTIFICATION

Staff should routinely assess and compare ordered and performed services against authorization before the service. If authorizations need to be updated, staff must communicate with providers and payers, which includes recording authorization verification calls and cataloging authorizations with digital images. Finally, peer-to-peer meetings can be set up between practice physicians and physicians who work for payers to obtain prior authorization approval. Similarly, second-level reviews of medical necessity by physicians can be scheduled.

MEDICAL NECESSITY

To meet the medical necessity criteria, staff should engage in peer-to-peer meetings and verify that all clinical documentation is submitted for continued stays. Likewise, they should confirm that contracts include an option for administrative days to cover extended stays caused by difficult placement. To support the physician’s decision, staff should also document the severity of the patient’s situation. Finally, the team should understand the practiceโ€™s overturn rates and when acting on a denial is prudent.

MEDICAL CODING

With medical coding, staff should focus on the accuracy of discharge status coding and admit/discharge rates and confirm that the chargemaster is up to date-and accurate. In addition, based on the provider’s assessment of the patient’s health status at admission, staff should ensure the patient care situation is well documented.

MISSING OR INVALID CLAIM DATA

So many factors can contribute to claims denials, but staff should focus on ensuring that:

  • The practice does not submit duplicate claims
  • There are no missing payer IDs and/or procedure codes
  • Diagnosis codes are valid and effective on date of service
  • Billed procedure codes are correct for date of service.

Moreover, practices should check that their claim scrubber is capable of high-quality edits, new edits are clear to billers, and that issues are resolved proactively. Finally, staff should observe proper follow-up processes to ensure no duplication of denials or rejections.

SERVICE NOT COVERED 

Uncovered service can be particularly challenging for practices as providers and patients often know the service will be denied during presentation. Thus, it’s essential to collect the payment upfront. For Medicare patients, it’s vital to collect signed Advance Beneficiary Notice (ABN) of non-coverage forms before performing these procedures.

With denial rates on the rise, practices need to be vigilant in taking steps to prevent them. The good news is that most denials are preventable if resources are deployed to address them.

Denial reduction RCM best practices

As the healthcare system continues evolving, so must how we manage denials. Keeping up with the latest best practices can take time in an ever-changing landscape. However, staying informed and keeping up with the latest trends ensures that your denial management practices are as effective as possible.  

One of the latest trends in denial management is the use of data analytics. By analyzing data, you can identify patterns and trends in denials. The collected data is used further to develop strategies for reducing denials. For instance, if you notice that denied claims are often for a specific type of procedure, you can establish a protocol for that procedure that will help to reduce the number of denied claims.  

Data analytics can also help healthcare organizations identify potential waste and fraud areas and better understand the causes of denials and other issues. By using data analytics, healthcare organizations can improve their RCM processes and ultimately improve the quality of patient care they provide.

Another trend in denial management is using artificial intelligence (AI). AI is used in healthcare denial management systems for multiple applications. For example, AI is used to identify patterns in denial, appeals, and payment data. AI can generate attractions based on these patterns automatically, help improve efficiency and reduce errors. Finally, AI can develop predictive models to help healthcare providers anticipate and avoid denials.  

Finally, it is essential to keep up with the latest changes in the healthcare system. New laws and regulations can impact how denials are managed. By staying current on the latest changes, you can ensure that your denial management practices comply with the latest rules and regulations.  

Tips for streamlining your revenue cycle management process reduce denials 

Healthcare leaders must continually assess their RCM process to ensure it operates as efficiently and effectively as possible. Here are a few tips to streamline your RCM process: 

  1. Automate as much as possible.  
  2. Continuously monitor and assess your RCM process.  
  3. Use data to drive decision-making.  
  4. Outsource RCM tasks to experienced specialist partners.  

The most effective way to beat increasing denials is to invest in a comprehensive RCM solution. With AIMA, you can trust our years of experience and expertise in proactively managing and processing medical claims to mitigate denials.

AIMA clients witness an average denial rate of just 2%, significantly lower than the industry benchmark of 5%. Plus, 99% of claims we process achieve first-pass acceptance.ย 

Our dedicated medical billing, coding, AR, and compliance teams work in harmony to prioritize you realizing a fully optimized healthcare business for a more profitable and efficient future.

Get a free, confidential, no-obligation financial audit from AIMA. Give your healthcare business a financial check-up to ensure it is in prime health and stamp out denied claims.