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:
1.Soft Denials:
Soft denial is temporary and has the potential to be paid if followed up effectively and regularly.
Does not require any appeal.
Cause:
Pending medical records receipts
Denied for inaccurate information
Coding and Charge errors
Pending Bill
Receipt of invoice is pending.
2.Hard Denials:
A denial that is permanent and results in revenue loss.
Requires an appeal.
Cause:
No Pre-authorization
Non covered service
Bundling
Untimely filing.
3.Preventable Denials:
A denial that results action or inaction depending on the provider services.
Usually involve services those have been delayed.
Account for 90% of denials.
Cause:
Inaccurate Registration
Ineligible for insurance
Invalid codes
Medical Necessity
Credentialing
4.Clinical Denials:
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.
5.Technical Denials:
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.
Hope this article has provided enough information about Denials and Follow up. If any suggestions,
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