6 Steps to Prevent Denials
As with your patient’s health, prevention is key to avoiding the claim denials that have a serious negative effect on your bottom line. Payers typically don’t pay you any sooner than they have to, and if you give them an excuse to deny your claim, you can add two or more precious weeks’ delay. Plus, this doesn’t count the lost productivity of having the error(s) of a claim investigated and resubmitted.
Through our years of experience, the Advantum Health team has learned how to minimize denials in the first place and, when necessary, help quickly correct and resubmit claims and detect root causes to speed your payments. When you’ve already discounted your rates due to your payer contracts, this is mission-critical to ensuring that even more money isn’t lost to a bottom line that’s hardly ever as robust as you would wish.
The average denial rate for most practices ranges from 5% to 10%. For a small practice of two providers that submits 2,000 claims a month with an 8% denial rate, this results in 160 denied claims a month. Even at a charge of $100 per claim this means $16,000 a month in denied charges…not to mention the rework costs that can average $25 or more for each claim.
Best practices to proactively prevent denials
90% of denials are preventable, reported Morgan Haines of Advisory Board in “An Ounce of Prevention Pays Off.” So, while effecting process change in an always-busy practice can be daunting, some often-simple operational process changes can ultimately save you both time and money.
Granted, it’s often hard to know where to begin, let alone implement these changes. But here are six areas that can make a significant improvement to prevent denials:
- Educate and communicate
- Verify insurance prior to service
- Know your payers
- Document accurately and appropriately
- Leverage technology
- Learn from mistakes
Educate and communicate
Internal and external communication is typically key to the success of any business, and in the ever-changing healthcare industry, it’s certainly no different. From your front office through your medical staff and back office, it’s essential that team members understand their role and its importance in your success — from patient check-in to clinical care, documentation and collecting patient payments — to ensure optimal financial outcomes and customer satisfaction.
It’s also critical that your staff knows key elements such as what services you do and do not provide, what’s covered by each patient’s insurance plan, their co-pays and deductibles, and proper coding for each service provided. Even missing payment for a simple flu shot adds up.
It’s worth saying again: communication is key, as is continuing education and continuously updated certifications to keep every member of your team knowledgeable about the latest healthcare changes.
Verify insurance prior to service
As location is the foundation for success in real estate, the essential need for early verification of eligibility cannot be overstated in healthcare financials…especially for preventing denials or write-offs. Never assume even a long-time patient hasn’t experienced an insurance change due to job change or loss, turning 65 and beginning Medicare, going on and off Medicaid or commercial insurance due to income, and other factors that affect coverage. Even the same insurance can have a different group or member ID number, coverage, deductible or co-pay from year to year. Check a patient’s insurance before every single visit just to be sure.
Know your payers
Most providers will accept 15, 20 or more insurance plans. Even similar plans (the various “Blues,” for example) have variations as to what is allowable and reimbursable. They also require each provider to enroll in their plan before any reimbursement is made.
This is a complex but critical area. Having a close relationship with your key payers makes it far easier to understand current and evolving rules for medical necessity, prior authorizations, referrals and more. Being on a first-name basis with your local representative can help you get the answers you need timely, consistently and accurately.
Accurate, appropriate documentation
With the much greater complexity of ICD-10 coding, more specificity than ever is essential in your documentation. The shorthand notes of old just don’t cut it if you want to avoid a denial and receive appropriate payment. Again, continuing education and communication are key.
Investing in a practice management (PM) and/or electronic health record (EHR) system is expensive and time-consuming. It’s an incredible waste of that investment if your entire team doesn’t use it to full advantage. If everyone is properly trained to use the same system (or fully integrated ones) across your operation, there’s fewer chances that crucial information gets lost in translation. Remember that, as in care delivery, most errors occur during “handoffs” — in hospitals it can occur between shifts or departments; in practices, it can be from the PM to EHR system or from the front to the back office.
One of the many services Advantum Health offers is in IT system selection, implementation and training. We use — and recommend our clients use — one of the systems that provide built-in edits that review and flag claims before they’re sent to the payer. This immediate notification prevents denials by pushing the edit and review tasks earlier in the revenue cycle process, saving days or even weeks for you to get paid.
Learning from mistakes avoids future ones
As in life in general, always learn from your mistakes, and revise processes that are causing a repeat of denials. After all, why keep the doing the same thing that has the same negative outcome? In the rush of daily patient care and billing functions, this essential step is often overlooked, but it simply cannot be in an industry that changes as rapidly as healthcare. The devil is indeed in the details, and the details continue to evolve.
Effecting constant change starts at the top
Embracing change can be hard, but it’s a constant in today’s ever-evolving technological society. Nowhere is this more true than in healthcare. Your entire practice must be open to change, especially anything that can move key components of the revenue cycle further up in the care process to ensure your practice remains profitable and open to serving patients.
This is only possible if it starts at the top, with leaders who are demonstrably open to new and more-effective ways of doing things. When a team sees words in action, they naturally follow. Whether that’s new processes in your practice or partnering with a revenue cycle expert such as Advantum Health for coding and billing, constantly being open to change is most likely to lead to sustainable financial, operational and satisfaction outcomes throughout your practice.
If you’re above a 5% denial rate, a deep-dive analysis towards implementing improvements to your revenue cycle process can bear substantial fruit. Learn more about prevention being key to no more denials by participating in this short, on-demand webinar or contacting us at email@example.com.