How to Prevent (Denied Medical Claims)

It’s approximated that $3 trillion worth of medical claims are submitted every year to insurance companies, etc., with $262 billion worth of these claims denied. Approximately 65% of the denied medical claims are not resubmitted to the organization which denied the claim. Statistical data indicates that commercial payers are denying 58% of those claims.

Appealing against denials can eat up a lot of time and money, hence a good bit of health providers find it impractical to appeal against denied medical claims. Additionally, it can be a real burden to create a denied claim reduction program (within their medical billing process). This is due mostly to the extra manual processes, work and pressure stacked on internal resources.

However, handling denied claims shouldn’t be so difficult. Here are some denial management tips, which will make the handling of denied claims easier for healthcare provider teams. Review these tips carefully and implement them.

Claim Review Guidelines — Check These Before Submitting

Medical billing and coding professionals should use a checklist (QA process) before submitting every claim. This will create a much higher rate and probability of acceptance by insurance groups. Within the checklist, the following should be taken into consideration:

1. Get Proper Signatures
2. Claim Proofreading
3. Ensure that the Coding is Accurate under ICD-10-CM
4. Patient Information Confirmation
5. Authorized Information Release or Signature on File
6. Calculate Fees Properly
7. Physician Credentials Attached
8. Make Sure All Attachments are Included
9. Original Claim Forwarded

Know Your Numbers and other Denial Statistics

Health care provider resources handling medical claims should be aware of the dollar rate, the number, value of claims and the denial rate, before trying to resolve the problem of high number of denials. This helps discover the root cause of the denials and how systems can be improved and also assesses how many claims will be accepted in the future. The provider should understand the type of claims for which it can recover the maximum amount of money. It’s important to determine the trends in denied claims and take measures to prevent such trends.

For example, if a medical provider is making appeals for denied claims to a particular payer, and winning almost all the appeals, it is possible that they’ll will be able to work with the payer to make relevant process improvements, so that claims are not denied in future. On the other hand, if the healthcare provider is losing appeals, there are errors in the upstream process, so it is necessary to make improvements in the overall protocol to eliminate future problems.

The resources handling denied claims should not exclusively focus on getting denied claims for larger amounts resolved. Denial management additionally involves handling smaller problems which recur frequently, which collectively amount to larger figures.

Check Upstream Processes

A denial management team should try to determine at what stage the problem is occurring in the revenue cycle and how it can be resolved. If the problems are identified and resolved early, the efficiency of the program to prevent denials, as well as the revenue cycle, will increase. It’s advisable to analyze the processes in the revenue cycle. Often, a problem in an upstream process adversely affects downstream activities. After problems are detected (accountability application); solutions can be applied.

Leverage Data and Analytics / Attribution

In denial management, it’s crucial to have complete data on claims made, denied claims, reason(s) for denial, so that it can be analyzed to spot trends. Analytics tools should be used to find data set patterns more easily. Denial management often becomes easier after analytics is used, since it’s a lot easier to predict data. Reporting delays can take place for organizations who do not have real time analytics. Claims Analytics / Attribution tools are extremely useful resources for hospitals and medical providers, since they assist in determining denied medical claim trends, which ultimately cause revenue loss. The key is to attribute what works and why.

Team Up with All Departments

A denial management team should be formed within a medical provider. It’s a lot easier to handle denials if a group of internal resources are involved. Those resources that’ll consistently monitor issues and implement improvements. The team should meet regularly to discuss the root cause of denied claims. Suggestions to ensure that the claims are not denied should be considered. Get all departments involved on this team.