Resolving Claims Denials: A Comprehensive Step-by-Step Guide

Healthcare organizations are facing a tough situation due to various issues like higher wages, increased expenses, fewer patients, and uncertainty caused by the pandemic. This is making it hard for them to make enough money.

One big problem is that hospitals are losing about $5 million every year because of denied insurance claims. For some hospitals, this loss can be up to 5% of the money they make from patients.

The number of denied claims is going up, especially for hospitals, which have seen a 20% increase in the last five years. On average, about 10% or more of the claims are being denied. According to a survey, medical practices reported a 17% increase in denials in just 2021.

But here’s some good news: not all denied claims are lost forever.There are some medical billing services that can help you get reimbursement. In fact, up to two-thirds of them can be recovered. To do this successfully and at a lower cost, a smart plan that follows the rules of the insurance companies is needed.

Finding and Fixing Denied Claims

To stop financial problems from Denied Claim, the best plan is to avoid them in the first place. The main thing is to know why claims often get rejected, as per MGMA9:

For instance, CO-4 is used when the procedure code doesn’t match the modifier or the needed modifier is missing. Prevent this by using the right modifier. PI-204 is used when the service isn’t covered, and the bill should go to the patient. PR-1 means the patient’s deductible isn’t met, and the bill should go to secondary insurance or the patient.

Dealing with Denied Claim 

When we send a bill for payment, we really want to get paid. The best way to do this is by sending out correct bills from the start. This means paying attention to details, having the right people with the right training, and making sure everyone follows the right procedures in coding and billing.

But even when everything is done right, sometimes bills get rejected. When this happens, the goal is to fix the mistake, get paid, and figure out how to stop the same mistake from happening again. The people and processes in place help us reach this goal.

When bills are rejected, we need to take actions to reduce the chances of it happening again. We assign tasks to fix the problems by a certain deadline. We also check and score how severe, likely, and detectable the issues are. After fixing things, we check if our actions worked.

It all begins with a mindset that says we won’t accept mistakes that we can prevent. Many times, these mistakes are in our control and happen because we didn’t do something right in the payment process. For example, we can avoid many issues by making sure to check claims properly before sending them. Mistakes like missing authorization numbers or wrong codes can easily be prevented.

Best Practices To Combat Denied Claims

1. Know the Stats:

• Understand initial denial, dollar, and claims rates.
• This knowledge helps identify why denial rates are high and creates opportunities for improvement.

2. Keep the Process Organized:

• Losing track of denied claims harms revenue and causes administrative problems.
• Use organized denial management processes with accredited tools to track claims.

3. Identify Trends:

• Track, evaluate, and record denials to quantify and categorize trends.
• Use data and analytics to find and fix issues causing denials.
• Seek assistance from physicians, payers, or outsourcing partners to reduce denials and improve compliance.

4. Act Quickly:

• Follow a validated process to correct denials, ideally within a week.
• Established workflows help track claims as they enter and leave the system.

5. Keep an eye on progress:

• Watch how things are going to find out what’s working well and what needs fixing.
• Use this info to make things run better. It helps your group see what’s good and what needs to get better.
• Think about using automatic systems for dealing with denials. This way, you’ll have more time to fix things that were rejected.

6.. Check how things are going:

• Look at how well things are being done in different areas, like checking payment advice, fixing mistakes in payments, dealing with claims that got zero payment, signing up patients, and making sure insurance info is right.

7. Make sure patient info is correct:

• Use patient portals to update their info.
• Take time to make sure the info is right, and tell the billing team about any changes.
• Teach your team to get better at handling data.

8.Learn from past mistakes:

• If data isn’t set up right, claims might get rejected.
• Use info from electronic health records (EHRs) to find payer ID lists and insurance details.
• Keep track of trends in rejections and denials. This makes it easier to figure out the problems and fix them fast.

Conclusion

Eliminating denials completely may not be possible, but using a smart strategy can help a lot. This means following proven methods, looking at data, and using technology like automation. This can make denials hurt less for your business.

Making a good process to manage Denied Claims takes time and needs constant checking to work well. But putting in the effort to reduce write-offs as much as you can is important. It helps protect a healthcare organization’s money and keeps its business stable.