Expert Tips to Reduce Medical Claims Denials

Organizations may not realize how much money they’re losing by not paying enough attention to the denial management process. In addition to losing revenue they are owed or receiving it days or months late, these organizations increase their risk of non-compliance with various regulations, decrease patient satisfaction, and waste time and resources that could be better utilized elsewhere.

The reasons for medical claims getting denied can stem from various issues, most notably patient eligibility, missing information, submission issues, coding errors, and prior authorization.

Fortunately, many denials in medical billing are preventable, and the following tips are a great place to start. By following these tips, you can optimize your revenue cycle one step at a time and avoid losing out on money your practice is rightfully owed.

Tip #1: Implement a Strong Denial Management Strategy


Analyze Denials for Better Insights

A strong denial management strategy is pivotal in understanding the root causes of claim rejections. By regularly analyzing denials and reverse engineering denial management, the healthcare provider can identify recurring issues and patterns.

Create a Feedback Loop for Continuous Improvement

Make sure that the information learned from your denial analysis is used to educate the billing team. This loop of analysis, feedback, and education can become a powerful tool for a continuous reduction in errors going forward.

Take Preventive Action to Reduce Future Denials

You may find that additional investments or actions are needed. These could include hiring additional staff, revising billing procedures, or enhancing patient data collection processes. Regardless, act as quickly as you reasonably can. The money generated from these preventative actions could pay for themselves and then some.

Tip #2: Improve Essential Billing Processes


Code Diagnoses to the Highest Level of Specificity

Knowledge gaps, time pressures, documentation challenges and fear of audits can decrease coding specificity. But when coding specificity is done to the highest level, it can improve the accuracy of reimbursement, reduce requests for additional information from payers, and even strengthen compliance with regulations.

Ensure Coverage and Eligibility

Eligibility is a huge issue and is often one of the top reasons medical claims are denied, specifically for emergency care or urgent care/walk in care facilities. By verifying coverage before every appointment and utilizing electronic verification systems to streamline the process, providers can increase accuracy in patient eligibility verification, even in fast-paced facilities. 

File Claims on Time

Late submissions typically result from human error and time constraints. While there are a number of practice management software suites with claims tracking, submission, and automation features, there are also organic solutions that can be easily implemented, such as setting internal deadlines and choosing electronic claim submissions over paper-based methods whenever possible.

Stay Current with Payer Requirements

In addition to electronic billing software with built-in payer rules, providers can assign staff to regularly check payer websites and portals for updates, subscribe to and read payer newsletters, and attend webinars or training sessions that are sponsored by payers.

Increase Revenue Cycle Management Efficiency

Simplifying complex procedures, eliminating unnecessary steps, and ensuring that the billing staff follow best practices can lead to a reduction in errors and denials as well as operating expenses.

Establish Clear Communication and Documentation

Clear communication and documentation between clinical and billing staff can ensure that necessary information is collected and accurately entered into the billing system from the outset. This can help prevent delays and denials that stem from common issues like late submissions or lack of eligibility.

Track the Claim Throughout the Entire Process

In many ways, this requires the implementation of other denial management tips to accomplish, but it is well worth the effort. By using a combination of claim tracking tools, payer portals, automated alerts, and a systematic follow-up process, providers can effectively monitor the status of their claims from submission to payment or resolution

Tip #3: Leverage Technology to Reduce Denials

AI and Automation for Accuracy and Efficiency

There are a number of technologies that can greatly enhance the accuracy and efficiency of the claims process. Specifically, using AI and machine learning in denials management can enhance staff efficiency, eliminate human error in data entry, improve coding accuracy, and perform a number of other functions to reduce denials.

Predictive Analytics to Anticipate Denials

An additional benefit of the above technologies is predictive analytics to foresee potential denial scenarios based on historical data. By analyzing trends and patterns, healthcare providers can make informed decisions and take action before claims are denied. These findings can also be a powerful addition to a feedback loop for constant improvements.

Invest in Advanced Billing Software

These systems have been mentioned in several other tips because they can be a game-changer for reducing denials. Many offerings include features such as claim scrubbing, which checks for errors before submission, and electronic health record (EHR) integration, which ensures that the billing process is fully informed by the patient’s clinical data.

Now Is the Time to Reduce Denials

Remember, every claim denied is revenue lost and the problem is only growing. Post Covid, denials have grown to an alarming 18%-20% of claims submitted and 65% are never reworked. By implementing the tips that are most relevant to your organization, you can buck that trend, reducing denials and transforming the health of your revenue cycle.

If you are interested in addressing the underlying reasons for your claims denials, contact Medical Practice Success today. Unlock the full potential of your organization with our cutting-edge Revenue Cycle Management (RCM) solutions. We understand the intricacies of financial processes in the healthcare industry, and we’re here to streamline and optimize every step of your revenue cycle.