Denial Management: How to Improve the Process

For physician practices and medical billers, there’s nothing more frustrating than a denied claim. The work was done but, through some technicality or minor coding error, the payer refuses to pay.

Practices must resubmit their claims with the hope that they corrected the problem and can now get the money they are owed. Even if the practice can collect, they’ve already lost a significant chunk of the money they deserve.

It costs $25 to $30 to manage the average denial, according to the Medical Group Management Association (MGMA). The best thing practices can do for their bottom line is to improve denial management and submit cleaner claims from the start.

Cleaner Claims
Manual denial management is a daunting task. Sifting through thousands of codes and recognizing what is being denied by which payer is a costly and time-consuming venture. The most efficient way to handle it is through denial management software systems.

“The goal for every practice or medical biller is to get their claim paid on the first pass,” says CareCloud’s Director of Operations Francis Guasp, CPC. “With how far billing software has advanced, practices can implement web-based denial management systems quickly and cost effectively to see improvement in first pass resolution rate almost immediately.”

Instead of working harder to collect less money, practices can utilize new technologies to get paid more while reducing labor costs. Francis recommends taking an in-depth look at your practice’s revenue and denial rates to determine what type of system could provide the most benefit to your business.

“Practices can get a stand-alone denial management system and bolt it on to their practice management systems, but I would suggest finding a system that is fully integrated with practice management, medical billing, scheduling and so on. It will streamline revenue cycle management and make things much easier,” explains Francis.

A Denial Management System Should Include:

Charge Entry Analysis – Check claims in real time to verify diagnosis and procedure codes as you type to ensure compliance before submittal.

Sophisticated Rules Engine – Track payer denial activity and identify new rules. Web-based systems can anonymously track these rules over the user base and automatically distribute new rules over the entire network for complete claims qualifications.

Claim Alerts – Automatic responses for events like claim resubmissions and claim status to enhance payment transparency and ensure that money doesn’t fall through the cracks.

In-Depth Analytics – Customizable real-time reporting to make sure claims are being paid in full and spot areas where improvements can be made.

Functionality and Flexibility – The ability to integrate with other software systems and be easily upgraded for changes in rules and coding.

A recent study conducted by Project HOPE, The People-to-People Health Foundation, Inc., found that it costs physician practices an average of $68,274 per physician per year to interact with patient health plans. Wouldn’t it be nice to get some of that time and money back?

Tell us how you handle tricky payers and denial management by posting a comment below.

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