Healthy Perspectives Year End 2013
Billing and CollectionsHarnessing Best Practices in Claim Denial ManagementClaim denials are a huge financial drain on physician practices. If nothing is done to reverse a denial, the revenue that it represents is lost to the practice. Attempts to manage and resolve the denial can cost an average of $25 to $30 per claim, according to the Medical Group Management Association (MGMA). Fortunately, there are some best practices you can employ to help manage claims denied by payers. Strive for clean claims The goal should be for your practice to have its claims accepted on the first submission. But, this requires taking steps much earlier in the revenue cycle. To begin the process, identify and record the exact reason for every claim denial. This can be done quickly and easily by using a denial management module that’s built into the overall practice management system. A variety of reasons will come up: The payer may insist that the stated diagnosis doesn’t support the medical necessity of the services, or there may be missing paperwork in the documentation for the claim. The claim may be denied if the patient isn’t a covered beneficiary of the payer to whom the claim was submitted. The various reasons that emerge should guide your practice to take two types of actions: 1) Make immediate efforts to correct the errors and reverse the denial, and 2) modify your practice processes to prevent the errors from occurring in the future. How to respond to a claim denial There are several possible responses to a claim denial: Correction . Once the root cause of the denial is established, try to correct and resubmit the claim. First, find any missing paperwork and add it to the claim. Change inaccurate codes to the right ones, or determine the patient’s correct insurer and submit the claim to it. Write-off . If the practice can’t fix the reason for the denial, or the payer refuses to accept the correction, it may make sense to drop the matter and write off the charge. A write-off is necessary if the practice can’t locate the documentation to support the claimed service or if it turns out that the service was really part of a bundle that already has been paid separately and never should have been claimed in the first place. Nonetheless, this should be the last resort to a denial. Appeal . In the event that your practice makes what it believes to be appropriate corrections, but the payer still rejects them, the last option is to appeal the decision. You’ll need to contact the payer to learn its reasoning on the matter. Then, you must prepare persuasive arguments in support of the claim. As appropriate, gather additional relevant documentation, or obtain more expansive statements of medical necessity from your clinicians. Finally, file the appeal and follow up with the payer every two weeks until the matter is resolved. Prevent future claim denials Your practice’s goal should be to avoid claim denials, so you’ll need to make systemic changes for the future. For instance, problems with incomplete documentation or improper coding may require retraining staff and clinicians. The people may be fine, but the processes they perform may need to be re-engineered. In that case, your focus should be on three objectives:
By following the above objectives, your practice will be well on its way to clean claims. It’s all in the details No practice wants to lose money due to claim denials. Your financial advisor can help you beef up your processes to help ensure clean claims in the future. • |
Understanding your claim denialsIt’s important to understand the causes of claim denials in your practice. This starts with reporting denials at the claim level and on a line-item basis, and then projecting trends over time. Careful analysis of good data will reveal root causes. Denials should be categorized and assigned to departments or individuals best suited to correct them. And corrective actions should be discussed at interdepartmental meetings to allow for cross-functional inputs. |
This material is generic in nature. Before relying on the material in any important matter, users should note date of publication and carefully evaluate its accuracy, currency, completeness, and relevance for their purposes, and should obtain any appropriate professional advice relevant to their particular circumstances.
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