Claim denials are all too common for many healthcare providers. More than a source of frustration, they result in delayed reimbursement that can affect a practice’s cash flow — even when they’re quickly remediated and resubmitted. What many practices don’t realize is that resolving denials isn’t enough. Auditing the reason for denial and instituting best practices for preventing common denials are critical steps in responsible revenue cycle management (RCM).
Understanding denied claims
While denied claims can impact healthcare providers’ revenue cycles, they pose challenges beyond just delayed payments. Denials can disrupt practice operations, diminish patient trust, and put a strain on a practice’s finances.
It’s crucial to distinguish denied claims from rejected ones. Denials often stem from coding errors, lack of medical necessity, or missing documentation. By categorizing denial reasons, practices can spot trends and address recurring issues effectively. This understanding is fundamental for instituting measures that not only resolve denials but also prevent them altogether to ensure a smoother cash flow for healthcare operations.
Best practices for managing denied claims
Dealing with denied claims starts with strong denial management practices. Implementing the following best practices can help healthcare providers tackle denied claims proactively to minimize revenue disruptions:
- Solid documentation practices: Create comprehensive records of patient information and treatment plans to build a strong foundation for claims and appeals.
- Accurate coding and billing: Train your staff to code with precision and adhere to billing guidelines to prevent errors leading to denials.
- Enhanced communication: Foster collaboration among billing, coding, and clinical teams to ensure comprehensive and accurate claims.
- Specialized technology: Use dedicated software to monitor claim statuses and identify potential denials in real time.
- Structured denial appeals: Establish a defined process for appeals, including assembling documentation and monitoring progress.
- Continuous staff training: Keep your staff updated with evolving industry regulations to reduce the risk of denials due to outdated knowledge.
Improving information capture and claims submission processes is the first step in reducing denials. The next step involves continuous process improvement through a comprehensive audit strategy.
Internal audit strategies for denial reduction
Effective internal audits form a cornerstone in mitigating claim denials. Understanding why denials happen is key to preventing them in the future. Audits can uncover systemic issues, analyze denial patterns, and improve operational efficiency while enabling corrective action. Here are a few things to keep in mind when performing an internal audit:
- Conduct multiple audit types. Retrospective, concurrent, and prospective audits respectively assess past claims, ensure real-time compliance, and prescreen submissions with a structured plan.
- Keep precision in focus. Random sampling offers an overview, while targeted audits concentrate on specific error-prone areas, encouraging transparent communication.
- Turn insights into action. Audit findings drive process refinement, fostering proactive and responsive denial management.
- Recognize technology’s role. Technology-driven audits employ software tools for data analysis, trend identification, and team communication, enhancing efficiency.
Claim denials demand action
As reimbursement processes become more intricate, it’s critical to address denied claims promptly and strategically. Minimizing the number of denials starts by understanding what’s causing them and how common errors can be prevented. Auditing across the revenue cycle can then address claim issues before they become hindrances to reimbursement. Internal audits and evolving best practices are a provider’s first line of defense against the rippling impact of claim denials — or worse, denial write-offs.
Learn more about denial and audit management with TruBridge.
