Denial Management Best Practices: How to Limit and Lower Denials
Denial management is an essential part of the revenue cycle in any healthcare facility. Denials are claims that are denied payment by insurance companies, and they can be a significant source of lost revenue. With the right strategies, however, you can limit and lower denials, maximizing your income. In this blog post, we’ll discuss why denial management is essential and explore some of the best practices that help you create a successful denial management plan.
What Is Healthcare Denial Management?
Denial management is the practice of tracking and managing claims that have been denied payment. It involves monitoring denials, identifying patterns, and working to reduce or eliminate those patterns. By understanding why claims are being denied, healthcare organizations can take proactive steps to ensure their claims are paid.
The Importance of Denial Management for Hospitals and Healthcare Professionals
If you understand the root cause of your claims denials, you can alter your billing and coding processes to avoid making the same mistakes. This can improve cash flow, shorten collection time, and even lower overall costs.
A proper denial management strategy can help you permanently resolve recurring billing and coding issues, allowing you to increase the strength of your revenue cycle management and focus more on providing expert care to your patients.
Tools for Effective Denial Management and Improved Claims
To limit and lower claim denials, your accounts receivable and denial management team must have the proper tools and training. Here are some denial management best practices that can lower your denial rate.
Accurate, Proactive Information Gathering
To avoid claim denials, your front-office staff needs to be thorough and accurate when collecting information like insurance and patient information. This includes insurance plans, addresses, phone numbers, and more. Your front-office staff also needs to coordinate with your medical billing and denial management teams to ensure they know what information is needed for a complete, accurate claim form.
Here are a few clerical reasons that claims are denied:
- Missing or invalid information on a claim form
- Duplicate claims submissions
- Service already adjudicated
- Service is not covered
- Claim submission was delayed
Understanding and Using CPT Codes Correctly
Many claims are denied because of the improper use of CPT codes. These codes, which are used to describe services during the medical billing process, are updated annually. If you use the wrong code or modifier, it can cause your claim to be denied.
To receive maximum reimbursement for your medical services, you need to stay up to date on current terminology and apply the proper codes to each claim. CPT codes are extremely specific, so it’s crucial not to over- or undercode for your services to make sure your claim is not denied.
Keeping track of CPT codes can seem overwhelming—inputting a single wrong code can disrupt your claims submission process and prevent you from receiving your maximum reimbursement. Explore our blog if you want to catch up on the recent 2023 CPT code changes!
Taking Time to Understand Payers
Each payer is different—they have varying claim submission and reimbursement protocols. As such, your organization’s billing and submission process may change depending on which payer you’re submitting a claim to. In addition, payers can be the primary, secondary, or tertiary insurance provider for a patient, which can alter how your submission process works.
For denial management, it’s critical that you take the time to understand these differences and learn how to navigate claims submission for each payer you work with.
Submit Claims Within Time Limits
The time limit for submitting claims also varies from payer to payer, so it’s important to submit your insurance claims in a timely fashion to avoid denials. For example, some payers give you 90 days to file claims, while others may give you up to six months or a year. It’s essential that you take the time to understand the differences between payers and their timely filing requirements.
Using Data and Technology to Your Advantage
Leveraging technology helps reduce errors and increase the speed at which you submit claims. Integrating an electronic health record (EHR) system into your claims management process allows you to transfer the correct CPT codes to your billing department automatically.
Your EHR system can also automatically withhold submissions for incomplete or incorrect claims and flag them for review. If your EHR system tags a claim as incomplete or inaccurate, you can access it manually and address the errors. This ensures that all of your claims contain the proper coding for your medical services.
Performing an Audit
One of the best denial management strategies is to perform an audit. Audits can help you discover the root causes of your claim denials, whether that be from incomplete documentation, processing errors, outdated coding, or issues with medical necessity.
Performing an audit allows you to evaluate the reliability and effectiveness of your billing and coding processes, helping correct critical flaws and optimize your workflow.
Enhance Your Revenue Cycle Management With Horizon Healthcare
At Horizon Healthcare, we understand the importance of denial management and strive to alleviate the stress of dealing with denials and partial reimbursement. We offer a comprehensive suite of services to help you manage denials, track claims, and ensure that your revenue cycle is running smoothly.
Reach out today to discover how we can optimize your billing and coding procedures.