Revenue Cycle Denial management is a common term often heard in the medical billing industry.
About 65% of claim denials never worked and the estimated loss of net revenue is 3%.
A claim is denied when insurance companies refuses to process the payment due to errors or other policy regulations for the healthcare service provided by healthcare professionals.
Revenue Cycle Denials Classifications:
- Soft denial is temporary and has the potential to be paid if followed up effectively and regularly.
- Does not require any appeal.
- Pending medical records receipts
- Denied for inaccurate information
- Coding and Charge errors
- Pending Bill
- Receipt of invoice is pending.
- A denial that is permanent and results in revenue loss.
- Requires an appeal.
- No Pre-authorization
- Non covered service
- Untimely filing.
- A denial that results action or inaction depending on the provider services.
- Usually involve services those have been delayed.
- Account for 90% of denials.
- Inaccurate Registration
- Ineligible for insurance
- Invalid codes
- Medical Necessity
- A denial caused on the basis of medical necessity, level of care.
- Can be coincidence
- Begins as soft denial
- Delays payment until clarification is obtained.
- A denial that insurance sends a notification to the provider stating the reason, why the claim was denied.
- It’s typically done through reason code.
- Includes payment delay with additional documentation.
- Clarification in coding
- Medical records request
- Bills itemized.
Revenue Cycle Follow up and Denial Management
Timely Follow up:
- One of the most critical steps in billing process is resubmitting the claims those are not received by the insurance companies.
- They have to be corrected and checked for errors before re-submission.
- In order to prevent denials and untimely filing, all the submitted claims are confirmed with payers within time limit.
- Claims are automatically notified if they are unpaid on time.
- If revenue payments are not cleared within the time period, billing team follows up with the specific insurance company.
- Necessary action will be taken on the unpaid claim to resubmit them based on the information gathered. It includes billing, coding and appeal letters.
- Specific denial tools will identify most of the common denials along with their cause.
- The team works to develop an action plan and take corrective measures to improve revenue payments and revenue the denials further.
Two Types of Claim Follow up:
- No Remark Claims:
Claims which has no absolute status is known as No Remark Claims.
- Last Remark Claims:
Claims which are not paid for various reasons and followed up routinely on monthly basis.
Key Components of Account Receivable:
- Follow up with the Payer:
Regular follow up with the insurance company on all the claims at any stage of aging plays an important role in account receivables activities.
- Claim Closure:
An AR team should be responsible to focus on reducing days in A/R claim submission and increasing payment ratio.
Timely follow up must be the core objective to increase the profitability of the payment.
- Online Claims follow up:
Various outstanding claims can be checked using insurance company website and portals.
- Automated Claims Follow up:
Claims will be followed automatically through device that calls the payers directly and provide the status of unpaid claims.
- Approach Insurance company or Payer:
In order to get a detailed reason for the claim denials, calling the insurance company’s representative will be the intelligent way.
Revenue Cycle Claim Denial Management Challenges:
Different Payer Regulations:
- The foremost step for best denial management is to find reasons for those claims denied.
- However, it’s not easy to retrieve claim denial statistics.
- Most of the providers may not have the access to the data from the insurance companies and often payers don’t release the data because of competition.
- Insurance companies keep claim denial information private and restricted to avoid customers with lower denial rates.
- Generally denial rates differ from one report to another.
- Each insurance company will have their own regulations for claims denials and to communicate them to providers.
- When there’s a lack of standardization, it would be difficult to decide payer’s language for claim denials.
- Those claims will have the chance to be denied twice by two different payers and codes.
Manual Claim Denial Management Process:
- Almost half of the providers are using manual claim denial management Process despite having health IT tools.
- Medical billing teams not only take the data but also manage with the insurance companies rules and codes.
- Manual denial management process actually slows down the productivity where lot of data is required to manage denials successfully.
- Healthcare providers or the medical billing companies should make the claim denial operations automatic avoid denials.
- Keeping up with the codes and different policies will be really exhausting and many software providers allow automatic updates of codes and requirements.
- Billing team must spend more time by checking claims twice to meet assured requirements.
- Identifying errors before submitting the claims is possible through automatic claim denial management process.
- Billing team will be aware of the procedure to get reimbursement and track down to check and recorrect the missing data.
Claim Denials are Avoidable:
- Almost 90% of claim denials can be avoided as they are the most common denial reasons demonstrated.
- Most of the denial reasons are:
- Inaccurate information or incorrect patient demographic details.
- Duplicate claim submission
- Non covered services
- Claims don’t come under plan
- Untimely filing
- Instead of rectifying the claim denial mistake, many providers and billers are repeating the same mistakes which leads to pushbacks but not payments.
- Ensure patient and insurance details are accurately collected and reported prior to the point of service.
- Accurate information is retrieved from patient scheduling and registration.
- It provides the ability to bill and collect the payments in most efficient and effective manner.
- The Medical Billing team will have to work with claim denials to understand and ensure to avoid errors in demographic details and insurance plan.
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