Taking a comprehensive look at the causes of denied claims, you will find that more than half are the result of front-end patient processing, i.e., inaccurate demographics, missing prior authorizations, or insurance eligibility issues. While the remaining claims are due to post-visit issues such as coding errors, timely filing, and a host of miscellaneous issues that often feel punitive without cause.
In a recent Medical Group Management Association (MGMA) article, 69% of healthcare participants reported that their denials have increased by an average of 17% in 2021. The report went on to say that the cost of reworking denied claims was about $25 per claim and that over 50% of denied claims are simply written off with no attempt to correct or resubmit.
What’s Causing Increases In Claim Denials?
As we look at the causes for increasing claim denials in 2021, you have to factor in the impact of COVID-19 as a contributing outlier. However, some issues that predated the pandemic still play a big role, including:
- Staff Training and Attrition – Changing working environments, work-at-home staffing, and turnover associated with the pandemic have all played a part in the challenges that add to the denials management processing dilemma.
- Increasing Denial Backlogs – As the problem grows, staff are losing the battle with processing and resubmitting the backlog of denials, and prevention strategies are barely addressing symptoms, let alone solutions.
- Lack of Technology – Workflow optimization has fallen behind where manual systems are used and this is compounding the overall reimbursement process.
Artificial Intelligence Assists Denial Management Workflow
Using artificial intelligence (AI) and machine learning throughout the healthcare payment lifecycle, it’s possible to improve the denials management process by virtually eliminating the manual, burdensome functions that cause issues once a claim has been filed. AI-enhanced automation allows an organization to capture actionable and meaningful data and then interact with a wide array of payers to accomplish painstaking tasks in real-time through bi-directional integration and communication.
Simply put, if your organization can automate front-end processes with a criteria-based algorithmic system submitting clean and accurate claims to payers, then you can greatly reduce the denials management process at the back end.
For example, let’s take a look at the prior authorization function. Long considered a necessary evil for providing patient care, business operations spend an excessive amount of time and resources to process and follow up on the vast number of preauths that are required.
A Front-End AI Solution that Eliminates a Back-End Problem
According to the AMA, more than 91% of providers say that prior authorizations have a negative effect on patient care by impacting clinical outcomes and causing delays in treatment if not outright abandonment of care.
By leveraging automation and AI-powered cloud-based technology to submit and update PA requests directly from a provider’s EHR/EMR, payer authorization could be obtained in real-time and patients scheduled efficiently. Creating a bi-directional integrated pathway allows automated status checks and updates to be communicated to staff through time-sensitive alerts and notifications.
With prior authorizations monitored and submitted automatically, claim denials will be virtually eliminated, and revenue will be captured in a timely manner, either through insurance payers or patients (if that’s deemed appropriate). Equally important, the time previously spent on manually managing the prior authorization process can now be shifted to higher-level functions and improving the patient experience.
For Those Denials that Inevitably Occur
It’s the nature of healthcare – even with the best-laid plans (or automation), some denials will still inevitably occur. By implementing a smart denials management system that has the following components isolated through AI-powered automation, you can ensure that claims are adjudicated or appealed:
Recovery forecasted and prioritized for pending, in-process, and denied claims
Predictive rules to determine “next best action” based on DOS checks, insurance benefits verification, CPT mismatch checks
Machine intelligence-powered strategy that prioritizes follow-up and appeal activities designed to capture every possible dollar
Ability to determine the root cause through analysis and recommend upstream improvements
With denial rates on the rise, it’s important to arm your practice to proactively manage the entire reimbursement process – from initial patient access through prior authorizations to final collections.
Today’s AI-powered software encourages organizations to improve their patients’ experience while providing staff with some relief from the burdensome patient access and RCM processes. Additionally, the cost savings in staff time and lost production (due to patient abandonment of treatment) offset the initial capital outlay for enhanced and upgraded technology.
Request a demo today to learn more about how AI can help improve denials management workflow for your organization.