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Three Tips for Reducing the Impact of Denials

Healthcare Professionals

Healthcare executives understand the significant impact claim denials have on the revenue cycle and correlating bottom line. Tackling this multi-faceted issue is complex and requires significant focus, teamwork, and in many cases – a fair amount of research into your specific organization’s data around denials.

Because it’s an issue that costs millions per year – addressing denials within your organization should be a top priority. Research indicates that up to nine percent of all claims submitted are denied the first time around. Here are three ways to ensure your denial management strategy turns into a denial prevention strategy.

  1. Get to Know Your Denials – Every organization’s denial data is different. Taking the time to evaluate your data will provide a wealth of impactful information. Understanding where and why denials are occurring at a root cause level is critical to tackling this issue in a strategic and effective manner across the organization. For example, are there specific service lines or clinical areas that are experiencing higher denials than others? Are there certain providers, facilities, or practices that are seeing a significant volume of denials? Are there similar issues in documentation that are causing an increase in denials? Are the denials higher with certain payers or managed care contracts or with insurance coverage in general? Whatever your top issues may be – understanding them and getting to the root of the problem is the first step to reducing the overall impact denials will have on your organization’s ability to recover revenue.
  2. Look for Areas of Greatest Impact – Once you understand where your issues are originating – identify those areas that are most likely to drive the greatest gains in terms of recovering or protecting your revenue. If certain costly procedures are being denied, or a particular physician group is responsible for a large portion of denied claims that are leading to significant lost or delayed revenue, start with those identified areas first. Similarly – if there are “quick fixes” that can be addressed promptly without major changes in workflow, tackle those issues next. Oftentimes, a little education and awareness of what’s causing denials can go a long way in turning the tides. Finally, if there’s a specific payer that’s denying a high volume of claims – focus on building that relationship by opening the lines of communication and working together to address the issues leading to specific denials. By promptly addressing the issues leading to the denials with the highest financial impact will help reduce the impact of denied claims for your organization.
  3. Focus on Data Validation – Analyzing historical data to ensure all documentation and information related to denials is thoroughly validated is a key step in managing current denials and preventing future denials – as well as identifying potential regulatory and/or compliance issues. Denials management (including underpayments) can be extremely time consuming and complex to reverse or appeal and therefore are often ignored, resulting in other related issues outside of lack of reimbursement, including aged receivables and bad debt. Denials management requires quick identification and action to make timely and accurate determination of next steps in order to appropriately adjudicate or appeal denials and underpayments and is essential to recover at risk receivables and obtain accurate reimbursement accordingly.

Denials management and denials prevention is an extremely challenging endeavor for most healthcare organizations and one that involves a team approach involving all key stakeholders from all revenue cycle departments. Working together, understanding your organization’s largest opportunities for improvement, tackling the most significant issues first, and validating your data before claims are submitted will result in significant improvements to your cash flow and long-term revenue cycle performance. To learn more visit www.gebbs.com

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