In a survey by the Medical Group Management Association, 69% of healthcare executives predicted that claim denials will continue to increase in 2022. About half of these executives estimated that this rise would be 10%, while 12% said it might be as high as 30%. Almost all medical offices must deal with the unpleasant reality of claim denials in medical billing. Around 10% of all claims made by a typical medical practice are denied. Health insurance claim denials have increased as a result of the medical industry’s switch to ICD-10. However, this does not imply that you must accept a denial rate of 10% or more. Since over 90% of denials are avoidable, you may reduce the denial rate to the industry average of 3-5% by following a few simple steps.
Healthcare Denial Management Process
Claims that have been determined to be invalid are not paid by payers. For healthcare organizations, both denied and rejected claims are a major burden since they result in lost or delayed income and a protracted appeals process. Denial management teams are used by some healthcare firms. These teams look into the reasons why claims are denied, fix any issues, resubmit requests to insurance providers, and file any necessary appeals. The lack of this facility, however, in many medical practices calls for the use of healthcare denial management strategies.
Best practices to reduce claim denials
Even the most diligent and well-known medical practices have health insurance claim denial numbers that are not zero. Even if coding, billing, and documentation are not simple tasks, it is still feasible to lower your denial rate.
Determining the primary reason for the high denial rates
Investigating the potential causes of the rise is the first and most logical step toward lowering high denial rates. Different practices and specialties have different justifications for high denial rates. Therefore, it is crucial to begin this process by gathering the claim adjustment reason codes that will serve as the foundation for a denial management process. These codes could be erratic and obscure, but translating them into useful descriptions can give you a complete understanding of the conditions at the heart of the issue. The following are some typical causes for the rise in medical denials:
- Absence of a reference or medical authorization
- A procedure, a diagnostic code, or both being invalid
- Expired eligibility of the patient
- Claim not submitted within the time frame
- False modifier
- Inaccuracies in the patient’s demographics
- Absence of supporting evidence
- Incorrect diagnostic codes
- Charging for unnecessary medical procedures
- Plan limiting provider’s ability to see patient
- The payer requires further details from the patient.
Checking patient’s information with a hawk eye
According to MGMA statistics on health insurance claim denials, prior authorization is cited as the main cause of medical billing denials by 42% of healthcare providers. Due to understaffing, busy schedules, or plain negligence, many medical organizations neglect to keep track of the vital and minute facts about the patients receiving diagnosis or treatment at their institution.
Complete demographic data should always be gathered upfront to avoid combustible situations and many claim denials. If your medical practice lacks sufficient employees, you may utilize software solutions to automate the management of important patient data, including appointment scheduling, patient check-in and check-out times, a record of performed medical treatments, and financial concerns. These platforms also control crucial data on copayments, deductibles, coverage, and contractual costs for certain services. By doing this, the danger of manual filing and billing is decreased, and the schedule of the administrative staff of practice is freed up.