Focusing on the denials management process helps providers to know how much they are losing out on revenue. Similarly, there are several reasons why the claim denials occur and harm the revenue cycle of medical practices. In addition, not managing denials properly may lead to compliance risks and reduce patient satisfaction. As a result, practices lose potential revenue and it makes the cash flow inconsistent. So, let’s see the major reasons behind the claim denials and what challenges practice face.
Major Reasons of Claim Denials
Considering the fact that claim denials are the main cause of revenue losses, medical practices need to prevent it. Likewise, it takes a lot of time and resources to manage denials which can be allocated to core business tasks. The primary source of denials is patient eligibility where the practices need to verify the insurance eligibility before rendering services. Similarly, verification of a patient’s eligibility helps providers to decide whether the services are covered by the insurance or not. As a result, physicians can save their time and reduce the chances of claim denials. Also, hiring a medical billing company in USA can help practices to reduce the denial rates significantly. Besides this, the following reasons also lead to claim denials:
- Missing or inaccurate information
- Duplicate claim submissions
- Delayed submissions to payers
- Incorrect CPT/ICD-10 codes
- Improper documentation
- Not going for prior authorization
- Out-of-network payments
- Challenges Medical Practices Face
Providers face many challenges when it comes to revenue cycle optimization. Similarly, these challenges can be mitigated with an efficient billing and coding process. In addition, practices should calculate how much revenue they are losing in the form of claim denials. Also, they should try to submit clean claims with accurate codes proactively to reduce the denial rate. So, these are some challenges that practices face in managing denials.
Absence of Trained Billing Staff
Small practices normally do not have trained staff for billing and coding. As a result, there is a chance of claim denials occurring from incorrect submissions. So, practices face reimbursement delays and non-payments due to denials. Since the practice staff is burdened with administrative tasks, outsourcing billing to industry experts can improve the denials management process. Further, third-party billing solution providers have experts who know the ins and outs of billing.
Relying on Manual Submissions
The reliance on manual processes increases the risks of mistakes in billing and coding. In addition, it takes more time to perform tasks manually as compared to automation. So, going for RCM automation is preferable to optimize the financial performance of medical practices. Moreover, it helps small and mid-sized practices to eliminate the risks of denials occurring from inaccurate submissions.
Best Practices to Manage Claim Denials
The preventive approach is better than rectifying the mistakes. Having said that, it is easier to implement a proactive approach for claim submissions rather than re-submitting claims after denials. Also, it takes resources and time to resubmit claims and practices needed to avoid it. Here are some best practices to manage denials which can boost the RCM process of medical practices.
Providers should devise a mechanism of verifying the patient’s eligibility before the visit. In addition, patients can be given a pre-registration form to enter the information about their insurance coverage.
Keep the accurate record of the patients, like collections and demographics. Keep in mind, these things are important when it comes to payments from insurance companies.
If the patient fails to submit the insurance information prior to the visit, ask the patients to reschedule the appointment instead of continuing with the incorrect information.
Keep track of payments and pending collections to keep the exact information. Similarly, timely submissions lead to on-time payments and improved cash flow.
Hiring a medical billing service in USA can help small and mid-sized practices to work with industry experts. Their trained staff can execute billing and coding efficiently.
Try to find the root cause of denials and make sure you avoid the reasons leading to greater denial rate. Also, find the trends in claim denials and keep a vigilant eye on the revenue cycle.
Reporting can solve many challenges, running reports frequently enable providers to find the problematic areas in the billing and coding process.· Focus on investing in the technology which enables practices to reduce manual work by integrating automation in the RCM process. Reduce denials with an automated billing solution.
Final Thoughts
The denials management best practices can help medical practices to decrease the rate of claim denials. In addition, it improves cash flow, optimizes reimbursements, and enhances the revenue cycle process. Likewise, if practices are effectively managing denials, the chances of potential revenue leakages are minimal. As a result, medical practices are able to increase the overall collections from payers and improve their financial well-being.