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How to Implement a Successful Denials Management Process

Claim denials create a substantial amount of revenue leakage for healthcare providers. Similarly, the increasing denial rates constitute revenue losses and need immediate attention. The studies show that healthcare providers do not resubmit 65% of the denied claims. Therefore, effective denials management is the solution to all the problems related to lost revenues. Tackling this issue proactively and resubmitting the claims accurately can save providers from losing their money.

The denials in medical billing result in greater days in AR and cash flow issues. Thus, it is important to find the root causes of denials and address the problematic areas. Preventing denials with a proactive approach of claim submissions can improve cash flow and reduce the days in AR. In addition, healthcare practices are able to enhance the revenue cycle by getting paid for services on time. Further, the productivity of the team increases and the staff is able to focus on patient care.

Root Causes of Claim Denials

Healthcare practices should focus on finding the root causes of denials and address them to optimize financial performance. Some of the causes of denials are:

Poor communication between the teams can lead to inefficient workflows. There should be clear communication between the front and back office to ensure seamless practice management. Efficient denials management process is defined by a clear process of communication between all the teams.

Special attention to the documentation is required to make sure that claim submissions are appropriate. Also, keeping an eye on medical codes is essential as incorrect codes lead to claim rejections and cause revenue losses.

The process of claim processing is undoubtedly complex and it needs special attention from the medical coding team. Incorrect codes lead to denials and increase the AR backlog. As a result, medical practices face revenue leakages.

Whether it is a specialty-practice or hospital denial management process, the medical billing team should focus on the causes of claim rejections. Likewise, knowing the causes help to devise an action plan for managing denials.

Strategies of Effective Denials Management

Implementing an effective strategy that works is crucial to minimize the effects of claim rejections. Healthcare providers should focus on a proactive approach rather than spending time and resources on resubmissions. So, let’s look into some strategies and best practices to prevent denials in medical billing process.

  • Identify the areas which require immediate attention and find causes that affect the revenue cycle adversely.
  • Try to prevent the root causes from happening and use a proactive approach to prevent claim rejections.
  • Verify the patient’s information thoroughly to make sure that providers get all the data related to their patient. For example, address, occupation, insurance coverage, etc. should be taken in the beginning.
  • Providers should tell the patients about their financial obligations because it helps patients know accurately how much they need to spend for out-of-pocket expenses.
  • Prior authorization can help providers know whether the insurance covers the expenses or not. To avoid denials, practices should go through the prior authorization process before patient scheduling.

Summing Up

Healthcare practices can improve the financial performance by collaborating with all the stakeholders. In addition, hospital denial management requires complete documentation along with error-free coding. Similarly, improving the entire process with time helps in streamlining the practice processes. So, effective denials management results in better cash flow, reduced AR days, and better clinical performance. Make your practice financially successful and obtain large revenues by avoiding denials.

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