How to reduce Claim Denials and increase Medical Billing Practice Revenue collection is one of the most important concern in revenue cycle management and optimization.

With changes in the economy, legislation and healthcare reform; healthcare service providers are facing financial issues in terms of improving profitability.

Claim Rejections by Medicare, Medicaid and other insurance providers have become a major headache affecting many healthcare service providers. It is not a surprise that between 3-5% of net revenues is normally lost as a result of payment denials by insurance companies.

Year 2014 statistics shows that that up to 25% of claims submitted to insurance companies always end up being turned down because of errors that can be easily be identified and managed. Managing and reducing medical denials is one of the most important step towards increasing Medical Billing Practice Revenue for the providers as decreasing health care costs for the patients.

How to Reduce Claim Denials and Increase Medical Billing Practice Revenue

Claim denial or delay come with its own consequences that can harm a healthcare service provider. These include:
  • Increased costs of appealing the denial something that should always be avoided, It is worth noting that reduced reimbursement from many players would always impact income generation.
  • Some rejections are not appeal-able once a claim has been rejected on the first instance of posting a claim; this essentially translates to loss of income for services provided.

Revenue Cycle and Accounts Receivable Audit to Reduce Denials

An annual audit for the assessment of efficiency and effectiveness of Revenue Cycle and Accounts Receivable is the first step towards Denial Management.

Analyze the annual practice data including payroll, staffing, labor, payer mix, contracting, revenue cycle, accounts receivable (AR), billing/expenses, supply costs, sales prospecting and closing, denials, utilization review, staffing, and costs of core services. The revenue cycle audit must be able to answer following questions:
  • How many claims are being submitted?
  • How many claims are being rejected?
  • What are the more common reasons for claim denials e.g services not covered, medical necessity not established, prior authorization not obtained, claims filed incorrectly, incorrect diagnosis code, provider error, lack of supporting documentation, coverage terminated, timeliness of filing, improper coordination between primary and secondary providers.
A recent survey conducted in United State reveals that the single largest yet avoidable reason for about 78.2% of all Insurance Claim Denials is incorrect patient demographic information.
Therefore, the answers to above all question are essential to let you know how to reduce denials for your practice.

Reduce Claim Denials and Increase Medical Billing Practice Revenue

As a Senior Medical Insurance Claims Analyst, below are few steps to Reduce Claim Denials in order to increase Medical Billing Practice Revenue from my years of experience in Medical Billing industry, working on various practices and specialties:
  1. Updated Patient Information

    It is common for patients to update their personal and insurance information that is vital when submitting claims for reimbursement. It is prudent for Practice Staff or Medical Billers to always take their time in asking the patients of their updated insurance card and updated address.

    Many claims are normally turned down because of mistakes in patient profile or demographic info. Some of the patient information like First Name, Last Name, DOB, Phone Numbers, Address and SSN. should always be counter checked.

    Further, medical practice billing staff should always in touch with a patient's insurance provider to ensure the healthcare provider is a component of the policy's network.

  2. Eligibility Verification and Authorization

    Medical Billing staff should always make an effort of getting the phone number of their patient's insurance provider. This is essential to verify details of a patient's Insurance coverage or benefits verification prior to sending in the claims. This process should ideally be done one day prior to the appointment.

    Insurance plan eligibility checking should always be done quarterly and more frequently especially in instances where they are employer sponsored coverage. The reason for this is that employment can always vary from time to time with group health plans also being affected. Three most important questions that billing staff should always ask in this step include:
    1. Will the patient insurance be able to cater for all the cost at the time of a patient visit?
    2. Is the practice in network for the patient or not?
    3. Will the patient be required to co-pay for his visit and by how much?

  3. Check for Coding Errors and Deadlines

    All claims should always be filed ahead of insurance vendors filling deadlines while ensuring the claims are fitted with the legitimate and complete HPCS and CPT codes whenever applicable.

  4. Check CCI for Medicare and Medicaid Services

    Always apply National Correct Coding Initiative (NCCI) for Medicare and Medicaid Services in your defense. If you are up to standard as far as the CCI goes, use it when appealing denials and defending your billing. If you think that CCI is a popular crime-fighting drama on TV AND you select your own CPT/Billing codes, you may be in trouble.

  5. Resolve Detected Problems

    Any problems that might be detected in the first stages should always be solved as soon as possible before filling a claim with an insurance provider. Very few people understand the entire billing process, therefore it would the work of the billing staff to sit down with the patient and try to sort out all the problems amicably. Small problems with many patients can always escalate into frustration when they are left in the dark. Sharing any troubling findings with patients is thus essential.

    Staying ahead of the problem in terms of billing is essential if all the costs of medical billing are to be minimized, this also presents an opportunity to fix an issue before it holds up payment. Engaging in preventive care and effective communication with patients is always sure to considerably minimize the chances of a claim being turned down by an insurance provider.

  6. Medical Claim Denial Appeal Advantages

    A well documented and supported Denial Appeal does more than what is believed. The insurance workers become cautioned about future denial of your medical claims for bogus reasons. You can also get a Medical Billing Advocates help for this.

    Approximately 30% of all claims submitted to an insurance carrier on the initial submission are denied whether they are correct or not. Insurances workers do this because less than 25% of medical practices appeal their claims denial in in USA.

    Most practices think they made the mistake when they get a denial from a carrier and so they don't appeal because they believe they will get more denials. The fact of the matter is other way round.

    The worker at Medical Insurance company are human like us an as pron to error as the worker involved in claims submission process. One successful appeal send them a message that you are vigilant about your claims making them cautioned to avoid as much as possible to issuing denials and raising disputes.

  7. Use Reporting System

    The last but an important step to decrease denials takes us back to where it all has started, the need for an effective reporting system to be in-place and available for audit anytime. You should consider using a healthcare IT solution like an EMR System, some of the Medical Billing Softwares or a Free Billing Softwares for Small Medical Practices for the purpose, if you are not using it already.

    A good reporting system is necessary to analyze all denials qualitatively and quantitatively at any point of time in a financial year to effectively avoid some of the very obvious reasons, right now rather then year end, when its already too late.
Obviously there are several further measures that can be taken to reduce denials of medical claims. These are the basics that Medical Billing and Coding professionals need to be aware of because they are the ones to correct all the mistake doctors have made with responsibility to submit and make medical claims paid.

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  1. I would have no answers for my patient. I would be embarrassed and it would ruin my small business.


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