A recent report reveals initial Request for Information denials are trending upward. Here’s how we’re tackling them head on.

By Andrea Utterback

When you work in the healthcare revenue cycle management (RCM) industry, you quickly learn to adapt to change, especially when processing payer claims.

Initiatives such as the Gold Card Program promise streamlined prior authorizations for many providers and procedures, with accompanying improved front-end efficiencies. That’s great. But new back-end issues can sprout up overnight, wiping out any front-end gains. One such issue is the increasing surge in requests for information (RFI) claim denials.

RFI denials aren’t new, but Advantum Health carefully monitors industry changes and wastes no time when denial rates rapidly accelerate — the latter highlighted in Kodiak’s latest benchmarking report, Death by a Thousand Requests. From the report’s introduction:

‘Nothing is more frustrating, perplexing, and needlessly expensive for a provider than an initial request for information claim denial from a payer. Initial RFI claim denials are rising and, along with them, providers’ administrative costs at a time when they can least afford it. It’s time for providers to take the fight to payers.’

Kodiak’s Key Findings

Understanding the sheer scope of RFI claim denials is the first step in developing effective strategies to combat it. After all, millions of dollars in administrative costs and delayed reimbursements are on the line.

Initial RFI claim denial rates up 33%

Unlike reimbursement rates that continue to decline, initial RFI claim denials are on the upswing — an 8.8% hike in just recent years, from 3.51% in 2022 to 3.68% in 2023 and 3.82% in the first five months of 2024. 

Some might interpret that as providers getting sloppy as they generate claims…new processes, new people. But analysis shows no evidence of increased errors; the difference between complete and supposedly incomplete claims seems arbitrary and often random. Thousands of claims previously deemed complete are denied until more information is provided, while others are accepted and paid as in the past.

Most frustrating is that most initially denied claims are paid after resubmission without any changes.

Resubmitting RFI claims costs billions

As noted, this trend adds administrative costs and delays financial reimbursement. Kodiak estimates healthcare providers spent nearly $2 billion in the first five months of 2024 alone as they’re on track to continue to spend more money each year simply to get paid for what they’re owed. This substantially increased from $1.5 billion in 2022 and $1.7 billion in 2023…a 33% increase in that period alone. And Kodiak extrapolates that the RFI-related costs for the first five months of 2024 could end up totaling nearly $4.6 billion for all of the year.

Inpatient claims more likely to be impacted

Kodiak reports that the inpatient initial RFI claim denial rate through the first five months of 2024 was 4.8% higher than all of 2023, and 8.1% higher than all of 2022.

Particularly for impatient care, traditional Medicaid programs and commercial payers are the primary sources of denials. Impatient claims are more complex than outpatient or office encounters due to multiple procedures and providers, thus are more likely to see increased denials. Unfortunately, delays for the higher-dollar inpatient claims has a greater impact on net revenue.

Top Five Common Causes of RFI Denials

While sometimes there seems no rhyme or reason to denials, as Advantum Health processes hundreds of thousands of client claims we’ve noted some underlying trends. Here’s some background as we and our clients work together to minimize the chance of denials.

If payers require additional information such as attachments or supporting clinical documentation, they deny payment with the denial code 252. Here are the five most-common causes Advantum Health encounters for RFI denials under that code:

1. Missing or incomplete documentation

The claim or service requires additional supporting documentation or attachments to be submitted along with the claim. For example, a payer may require clinical documentation before reimbursing a provider for a surgical procedure.

2. Failure to provide required remark code

To be processed and paid, a claim must include at least one remark code. This can be the NCPDP Reject Reason Code or the Remittance Advice Remark Code.

3. Lack of necessary information

The claim or service may be missing essential information needed for adjudication. This could include details such as patient demographics, provider information, or procedure codes.

4. Inadequate supporting documentation

Even if a claim contains the required documentation, it may not be deemed sufficient to support the claim or service. The supporting documentation should clearly demonstrate the medical necessity and appropriateness of the billed service. 

5. Failure to meet specific requirements

Some claims or services have specific requirements for reimbursement. This could include prior authorization, specific diagnosis codes, or documentation of medical necessity. 

If the provider does not meet these requirements, the claim may be denied with the dreaded code 252.

What Advantum Health Does to Combat Denials 

Our experienced team leverages revenue cycle management best practices and our own extensive experience to help prevent and resolve denials, including the increasing prevalence of RFI denials. 

Here’s an overview of our proactive approach:

1. Trend analysis

We perform a detailed trend analysis based on the payer, required documents, and CPT codes. This helps identify patterns and common reasons for denials, enabling us to track trends and address these issues proactively.

2. Implement new submission process

Advantum Health works with clients to address payer denial trends through an ever-evolving and comprehensive documentation-submission process that helps ensure all necessary information is included with the initial request. This reduces the chances of receiving additional information requests and helps expedite claim approvals.

3. Educate providers

Our client teams conduct provider training sessions, emphasizing the importance of including all comprehensive information in the initial documentation. This helps minimize the need for follow-up requests, making the process more efficient and effective.

4. Regular insurance policy reviews

Advantum Health’s operations teams periodically review insurance policies to stay up-to-date of any changes. This helps ensure that documentation requirements are always current and aligned with the latest payer guidelines.

Constant Evolution 

The healthcare revenue cycle presents continuous challenges for providers and third-party billing partners to overcome. As one hurdle is conquered, another emerges. The recent surge in RFI claim denials is but one — albeit very costly — example.

At Advantum Health, we don’t just react to these difficulties; we proactively evolve our strategies to stay ahead. Our commitment to data-driven decision-making, strategic planning, and operational efficiency helps ensure that our clients can confidently navigate the complex and ever-evolving RCM landscape. 

We’re more than just a billing partner; we’re a trusted ally in your pursuit of financial health and operational excellence.

If you would like to learn more about how Advantum Health can help reduce your RFI claim denials and improve your financial performance, get in touch today!

Source:

Kodiak’s Healthcare Revenue Cycle KPI Benchmarking Report: Key Findings