Denial Management is Just What the Doctor Ordered
Twenty Percent. This is how much of your practice or facility’s collections you are allowing payers to keep if you are not properly tracking and pursuing medical billing denials. This is a lot of money during the best of times, but particularly during tough economic times. Your practice needs an effective Revenue Cycle Denial Management system if you want to recapture this lost income.
Revenue Cycle Denial Management has become a universal and often abused term in medical billing. Some individuals use the term to describe a means of addressing claims denied for medical necessity. Others use the term to describe how some information is tracked for a specific payer, set of procedures or a place of service. Still others try to use it to describe what they do daily in the physician’s office.
To find out if your billing department or a current billing company is deploying a Revenue Cycle Denial Management System on your behalf ask them: (1) What is their Revenue Cycle Denial Management strategy; (2) What process do they use to methodically measure it and (3) what are the quantifiable results of it. If you do not receive rapid, concise answers with clear metrics then there is not a proper denial management system in place for your medical billing.
Few billing departments appreciate the value a good Revenue Cycle Denial Management system can bring to a medical practice or facility. A robust Revenue Cycle Denial Management system provides methodical management data for the billing process; the data are then used to (a) increase and (b) accelerate cash flow.
Fixing core denial problems and increasing collections requires keeping track of, understanding the magnitude of, and reporting on every claim that is denied by a payer. Tracking all denial across all payers is critical. The proper denial management system provides the data required to stop the root cause of problems and significantly increase the rate of first claim submission acceptance. If your practice is not measuring this level of detail then money, significant money, is being lost in the flood of denied claims pouring into your practice.
What is typically missing from troubled billing operations is the lack of the management-reporting expertise needed to extract the data in a concise and meaningful way coupled with a lack of methodical, measured billing process needed to correct mistakes. A comprehensive Revenue Cycle Denial Management system has two main purposes. The first purpose is to provide feedback on why claims are denying and how many claims are not being paid on the first submission to the respective payers. The second is to fix these issues. Effective Revenue Cycle Denial Management software databases must be designed to track, quantify, and report on all denials for all payers.
The standard denial management output should track by payer, the number of claims denied and the reason for the denials. This must be coupled with a dashboard reporting tool for quick visual management. With these reports the billing team can easily identify which payers are inappropriately denying claims; they can also compare these payers to their peers for proper trending and follow-up. This output allows the medical billing team to develop and refine payer specific rules to prevent future payer denials by insuring all claims are clean when they are submitted.
The in depth analysis described above also allows payers that are habitual violators of Clean Claim Rules to be identified and pursued. The data and analysis will allow many opportunities for process improvements and revenue enhancement for the practice.
A real Revenue Cycle Denial Management system gives you a way to optimize and accelerate cash flow. It also prevents your practice from falling victim to the games that insurance companies play with your reimbursements. An established and proven denial management system will improve your revenues between 5 and 20 percent.
Copyright 2008 by Carl Mays II