Denials and underpayments remain a top source of frustration for the healthcare industry. In fact, the average 350-bed hospital saw a 79% increase in denial write offs, representing $3.1 million dollars in lost revenue from 2011 ($3.9 million) to 2017 ($7 million).1 Adding to the problem is they can be a challenge to resolve — due to administrative costs and the declining overturn win rate.
Consider the following three tips to better manage denials:
Work denials only where reimbursement is truly at risk
Up to one-third of reported denials aren’t true denials,2 representing a wide gap in efficiency for internal teams. When true denials aren’t identified at the onset, staff may be working accounts in which:
- Money is not expected for reimbursement
- Payment has already been correctly made
- The denial is on a secondary claim, but there’s no expected secondary payment
- The denial was expected
To avoid the above scenarios, accounts need to be segmented out for only true denials. Claim touches are a valued metric in healthcare organizations. Minimizing waste and rework, with intended revenue recoveries, remain a priority. Providers should ensure teams are working on the right accounts, at the right time, with the right information to protect earned revenue.
Capture denials from all sources
Denials-related data comes in many forms — from various internal and external sources. When more information is available, it’s easier to determine actionable insights and drive optimal recoveries.
Executing effective data-driven decisions from all the datasets — transactions, paper EOBs and remits, payer contracts and websites, correspondence, Medicare DDE system and more — can lead to better processes and productivity. This yields more cash delivered faster, which results in reduced A/R days.
Develop strategies to prevent denials
Denials typically arise when there’s a failure to consistently follow an established process. Identifying patterns around denial root cause and scope of the denial, using predictive analytics, can help prevent lost revenue.
To stay well-positioned, providers need to deploy strategies that address denials related to insurance eligibility, medical necessity, authorizations, out-of-timely filing and clinical denials. Once processes are in place, it’s important to monitor improvements, track success rates and adjust workflows accordingly.
Learn more about overcoming inefficiencies in your A/R recovery and denial management processes.
2TransUnion Healthcare proprietary data