Denials Central
Discover the latest resources to help you avoid the rising trend in denials
Updated as of 08/27/2024
Taking control of your denials management processes has at least one obvious benefit: less revenue loss. Finances are critical to businesses, but these processes also have a deeper impact. When your denials processes are functioning effectively and efficiently, it also means:
- More empowered and productive workers who are less stressed and can focus on higher quality work
- Proactively avoiding errors and related downstream costs
- Quicker reimbursement
- Higher patient satisfaction
5 Steps to Better Denials Processes
1. Determine Priority Claims to Work
Collect data on which claims have the most denials and separate them into like categories. Consider information such as volumes and amounts over time, reason groups and codes, procedure codes, and regions, states and facilities.
Decide which group and/or types of denials are the priority and focus your efforts on those first. Common initial claim denial reasons include prior authorization/precertification, request for information and medical necessity. These reason types could be a good place to look for your priority claims.
2. Work the Trends
Using the data you’ve gathered, take action and work your priority claims. As you do, note extra steps and/or details you need to ensure the denials have the best chance of being successfully overturned. Watch for repeated errors and patterns in reason codes for denial so you can avoid them in the future.
You may notice that putting similar denials into a work queue is tricky, but doable. Grouping the trends isn’t necessarily the hard part, but how to make the process more efficient. Two common ways to improve these often very manual and time-consuming processes are through automated technology or using advanced functions in Microsoft Excel.
Additional ways to work the trends:
- Once you’ve identified a trend or likely cause of denial, take time to understand the payer’s appeal process. Research past trends to see what information was needed to successfully appeal the claims and note these patterns. If you track the changes as you go, you’ve made subsequent appeals easier and more likely to succeed.
- Submitting the appeal is only part of the process. Once you’ve submitted, make sure to track it to the payer and follow up based on the expected appeal recovery time. If the recovery time wasn’t something you noted in your initial research, go back and look at the historical data to give you an estimate on processing time. If necessary, call the payer.
3. Report on Issues & Successes
When you’ve done research on your organization’s data and spent time working priorities and trends, it’s time to stop and think. Analyze the process and results. Consider what worked and what didn’t. This step is qualitative rather than quantitative, so take time to fully describe what’s going on with and around the numbers.
During your deep dive, note potential patterns or trends that could become problematic for your organization. Being proactively aware of what’s going on is critical to building and maintaining efficient processes.
When you’ve compiled your report, communicate your findings with the leadership team. One report that’s particularly useful for leadership to understand is a denial opportunity report. When you pull reports like these, especially when they have visuals, it’s easier for others who aren’t doing RCM tasks every day to see the trends you’ve identified. Have an open conversation about what’s working and what’s not so you can execute on decisions as a team.
4. Generate Financial Reports
This is your chance to see, and show your organization’s leadership, that the changes you’re making are working. These reports should demonstrate how the new process is performing and what additional long-term changes or steps may be necessary.
Every practice has specific needs, so your financial reports may be different from others; however, there are basic reports you can begin to pull at a regular cadence to help you get started.
Monthly, weekly, and daily reports are all common for financial reporting. Monthly reports generally track progress and identify trends such as denial history and recovery results. Weekly reports establish work items. These can be reports like the denial opportunity report example above that demonstrate priorities for day-to-day tasks. For everyday use, daily reports are a great way to get a “temperature check” on the denial rate, service lines and charge amounts that are being denied, and even the top reason code groups.
Higher levels of leadership in an organization aren’t always in tune with back-end processes, so being able to demonstrate a successful denial management and recovery strategy could be key for getting additional resources you need.
5. Planning for the Future
Successfully improving and/or building processes for revenue management requires you to address the cause of the denials in your original data gathering. Has choosing a defined set of priorities helped reimagine your process? What holes, bottlenecks or other issues have surfaced as you’re working the process? What can you do to streamline and make your processes even more efficient going forward?
A few key ways you can measure the effectiveness of your new processes include:
- Benchmarking
- Key performance indicators (KPIs)
- Setting measurable goals and tracking progress
- Monitoring and updating report processes when necessary
Additional ways to plan for the future:
- Make an effort to understand the upstream processes to prevent denials in the future
- Categorize the denials and upstream staff needed and review what has to change.
- Document everything you find and use it to build organizational processes. Then, institutionalize the processes.
Evolution of Denials Management Technology
Denials aren’t new to provider organizations and over the years we have seen significant evolution in terms of technology available for denial management strategies. Hover over each tile in the sequence to learn more about how denials management has progressed.
CARC & RARC Denial Reasons
Before there were established denial reason codes like CARC and RARC, (CARC and RARC), analysis was done manually. Correcting and resubmitting claims was tedious and complicated, oftentimes resulting in unworked denials and revenue loss.
Work Queue Optimization
Technology next evolved to streamline workflows with work queues, bringing the opportune and likely-to-be-overturned denials forward, maximizing staff time and prioritization. We can now track appeal progress and create follow-up dates so in-progress items can be managed through completion.
Root Cause Recovery Opportunity Analytics
Using data, technology can understand the root cause of denial categories and provide actionable insights to help speed up the appeals process, allowing providers to make educated decisions and capitalize on the denials most likely to be recovered.
Automated Appeals
Armed with why a claim was denied and a potential fix, providers are empowered to automate their appeals using prepopulated appeal letters and forms that take the guesswork out of how to resubmit hundreds of like-reasoned denials with a click of a button.
Predicting Claim Outcomes
Moving forward, technology will focus on preventing denied claims before they get to the payer. By leveraging a predictive model and AI to inform probability of a claim being denied, and suggest pre-claim submission intervention actions, practices can prevent denials outright, speeding the timeframe to correct and resubmit potential denials by 30+ days.
The Future of Denials
Technology moves quickly, and the healthcare industry isn’t exempt. Keep an eye on the following technologies as they develop to see how your business can benefit.
Mounting denials is an intricate, but not impossible, challenge to overcome. So how did Cognizant’s client MetroHealth System, a large, safety-net healthcare system in Ohio, decrease denials by 30%? Automation was key to the organization’s success. “The biggest thing that we did was partner with them to utilize their technology and expertise to help identify the denial trends that we saw growing across all payer categories.” MetroHealth states.
Access the case study now to learn how Metrohealth leveraged enterprise technology to reduce aging receivables, decrease overall denials and gain $13M in revenue, year over year.
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