Management of Denials in Medical Billing
It is true that managing denials effectively can greatly increase health care bills. For years and years, we’ve known how the healthcare billing industry works and how important it is to focus on denial management. We would be losing around 10% of the charges as ‘uncollected’ amount if we do not work on the management of denials effectively. That is why denial management is given great importance, although each process is important in medical billing.
Managing denial requires more analytical and decision-making skills. Whether you work for a medical billing company or a doctor’s office, the indicator of your experience lies in how you handle denied claims and how you pay for them. Even for a hard denial, there is a chance that the insurance companies will accept it through a strong new appeal. To do that, you need to be an expert in the field, keep an eye on details, and actively seek out industry updates. Most importantly, you must possess original and logical thinking ability.
Denial management:
Insurance companies deny claims if they do not comply with the insurance policies presented by them. Therefore, a forward-looking approach can go a long way in handling denials and avoiding rework. We usually learn from denials how not to file a claim. But, when you have to collect other people’s money, you can’t experiment. Making repetitive mistakes can be extremely costly and you need to be smart enough to avoid such denials in the future.
Let’s look at the four main steps to take to manage denials effectively:
1. Analyze the root cause behind denials – When a claim is denied, it is important to understand the root cause issue rather than working to get the claim paid. When you don’t perform root cause analysis, the claim may be settled, but similar claims may be denied for the same reason. Working on the same denials over and over again will severely affect your progress and you will be doing unnecessary rework that takes up time and resources that can be used to improve the process.
2. Decision making – Once you’ve found the underlying problem behind the denial, all you have to do is decide how you can permanently fix the problem so you don’t encounter such denials again. You have to do a bit of legwork before coming to a conclusion. Check if there are any gaps in your solution. Put yourself in the shoes of insurance carriers and think. Remind yourself that you are working to deadlines and your decision has the power to reap incredible dollars. While you’re at it, you’ll be able to get a 360-degree view of the issues and decide accordingly.
3. Corrective measures: Now that you have found the problem and decided on the solution, the next thing to do is to implement it. Prepare a checklist, collect all the necessary information and/or documents and make calls if necessary. Make any necessary corrections in all appropriate areas of the medical billing software. Screen print the claim and audit it thoroughly. Once you feel it’s ready to go, submit it back to the insurance company.
4. Document the solution: Wait until the claim is accepted. When the claim is paid, immediately document the solution that helped pay the claim and communicate it to colleagues working on denial handling so everyone is aware of the solution to the problem.
Tips for effective denial management:
1) Maintain a separate file to enter ’cause for denials’ and ‘corrective actions’. When there is a peculiar denial case, it should be immediately updated in this file so that, over a period of time, it becomes a manual for AR analysts and helps them manage denials more effectively.
2) The provider manual contains a lot of information about insurance policies. Referring to it will solve many problems with denial handling.
3) Whenever there is a new update in the industry, it should be communicated to all team members and alerts should be set up in the medical billing software to prevent related bugs.
4) Establish a ‘utilization review team’ that will perform a full denial analysis and compare the denial solutions provided to different customer accounts to come up with the best solutions. The team will also work on underpayments and provide ready solutions for denial issues.
Give these tips just as much importance and make sure you don’t miss out on any new updates in the medical billing industry. Before you realize that you missed the latest updates, you would be in a situation to face denials. Avoid it!
When claims can be denied for multiple reasons, we can’t bring all denials under one roof, but in the case of global actions, we need to be more proactive in acting accordingly so we can avoid similar denials. In addition, whenever there are denials, it is essential to prioritize, visualize the problems and take the necessary measures. Following these tips can secure you more collections than expected.
