A recent study reveals that the denials rate has increased by 23% when compared to the numbers five years ago. Denied claims don’t contribute to the revenues of the healthcare practice, and this disturbs the financial stability of the practice immensely. Denial management services are the practice of streamlining claims submission to ensure there are no reasons for the claims to be denied.
Denials management is the strategic handling of denials by identifying the root causes of denied claims and tackling them headfirst. A well-designed denial management service can drastically help reduce the rate of denials, improve revenues generated, and shorten the accounts receivable cycle.
What are the basic steps in denial management services?
There are four basic steps in denial management services.
- Identification of root causes
The first step to solving a problem is finding the causes. Identifying the root causes can be quite straightforward. When a claim is denied, the payer usually gets back with explanations that are given in the form of Claim Adjustment Reason Codes (CARCs).
Analyzing the CARCs will help know the top reasons why claims are denied. Have a team to look through the past CARCs and note down the top four reasons for denials.
- Management of causes
Once the causes are identified, the next step in denial management services is managing these causes. If one of the top causes is coding errors, then getting a coding audit done could help rectify the problem. If improper documentation is the top reason why claims are denied, then an intense documentation training session for the admin staff may help.
Put together management strategies that can correct the problem areas and improve the chances of claims being reimbursed successfully.
- Monitoring the situation
Many practices go through the first two steps of denial management services thoroughly but forget the most important step – monitoring.
When causes are identified, and problems are rectified, it is now the work of the management to conduct periodic audits to see if the changes are being followed through. It is normal for things to go back to old practices when there is no one to monitor. That’s why monitoring needs to happen regularly to keep the billers and coders at the top of their game.
- Improving the current standards
Let’s say a healthcare practice follows through the first three steps of denial management services effectively. The practice will definitely see a decrease in the rate of denials. This does not stop here, though.
The practice must keep raising bars so the current standards are met and surpassed and the team has higher standards to focus on for the future. If the rate of denials had decreased from 34% to 23% thanks to the denial management service interventions, the next target should be to bring this number below 15%.
Improving the current standards helps the practice grow better.
Conclusion
Denial management services play a huge role in healthcare to ensure practices are paid the right amount on time and to improve the end-patient experience. Having a dedicated team to focus on denials management will help healthcare practices grow at accelerated rates and aid in higher revenue generation.
Read more:
Patient Balance – A significant but missed addition in the revenue cycle
How does a medical coding services company help your practice succeed?
The five major tasks of a revenue cycle management company in India
