In a complex and unavoidable reimbursement system dictated by third-party payers and governmental agencies, healthcare providers tend to be reactive and play catch up as rules change and claims are denied for new or different reasons. With the changing technology available today, hospitals and providers can step into a more proactive role defining the solutions and processes before submitting claims to be paid.

Most denials are still managed manually by multiple people handling and following up on claims. In addition, it is estimated that a full 65% of denials are relinquished or abandoned and the
revenue is lost due to the complexity of the resolution and the time involved. With the advent of Artificial Intelligence (AI) and predictive learning, the healthcare payment lifecycle is being revolutionized…but where to focus?

How to Avoid Claim Denials in the First Place

It’s important to dig into root causes and move to the beginning of the process—how early in the patient access encounter are the denials happening? Who owns the problem and who will take
the opportunity to gain efficiencies to reduce unnecessary rework and loss of revenue?

To answer these questions, it’s important to leverage your existing data and analytics and look for trends. By dissecting the entire step-by-step process, the answers become quite apparent.

1. Information Collection and Insurance Verification

To borrow an old adage: “garbage in, garbage out!” It has never been more important to ensure that your patient demographic and insurance eligibility information has been meticulously gathered, entered correctly, and verified. This first step in the process is where a significant number of denials happen because patient information isn’t entered correctly or updated when necessary.

2. Accurate and Complete Prior Authorizations

Identify where your system may be breaking down when processing and following up on prior authorizations. Whether you are the ordering provider or the specialty service providing additional procedures or testing, accurate and complete prior authorizations are key to maximizing your reimbursement and providing timely and efficient care to your patients.

According to a AMA survey, 92% of physicians report that the prior authorization system causes delays to patient care and can lead to care abandonment. Further, once a request is rejected by a commercial insurance carrier, it can cause delays from two days to two months. Drilling down through the prior authorization process and identifying/correcting problems yields huge benefits further down the reimbursement line by reducing denials and improving patient relations.

3. Coding

Another step in the healthcare payment lifecycle that deserves attention and review is the medical coding process. When assigning diagnosis codes, be sure that your providers are demonstrating “reasonable and necessary” evidence that meets the “standards of care for the community” when documenting the care that they have provided. Once that has been determined, appropriate ICD-10 procedure codes should be selected that demonstrate “why” the care was necessary.

Insurance carriers can reject a claim for many different coding criteria, so each needs to be guarded against, including (but not limited to):

  • Codes inconsistent with the modifier used
  • Non-covered services
  • Unbundled services
  • Missing documentation to prove necessity
  • Not coding to the highest level of specificity

As senior-level management, it is up to you to create an environment of cooperation and trust so that each group or department will participate fully and feel empowered to make suggestions
and explore creative solutions. Embracing these opportunities won’t eliminate the denial management process, but should achieve a significant drop in the time and effort required to follow up and resubmit rejected claims—as well as make a direct impact to your bottom line and your patient satisfaction.

Schedule a demo with us today to see how our prior authorization and RCM solutions can transform your healthcare payment lifecycle.