Few issues are more challenging and frustrating than claim denials for hospital systems. It can be time-consuming and eat into profits, with the problem is only getting worse. An analysis from the Kaiser Family Foundation discovered on average, 18% of in-network claims were denied, and some insurers denied up to 80% of claims. In fact, the entire industry saw a 20% increase in denials over the past five years.
With rising denials across the industry, providers need more than effective processes to rework denied claims. They must have a proactive approach emphasizing prevention over a reactive reworking of denials. This approach will not only mean higher revenue but ensures that hospitals provide patients with timely and more transparent bills. Patient satisfaction will increase, along with a higher likelihood of patient payments.
Here is why effective denial management is critical for hospitals today and how the right solution will improve the process for hospitals and patients.
Denial management is a critical aspect of revenue cycle management. It ensures that hospitals investigate each unpaid claim, identify trends, and appeal rejections to avoid payment problems on future claims.
Proper denial management ensures that a hospital maintains long-term financial stability. When hospitals efficiently manage their claim denials, they will have better revenue and collection rates while improving the patient experience.
Effective denial management has specific fundamentals:
● Prevention. Denial management experts oversee and implement preventive actions during the pre-admission, registration, scheduling, and billing phases. They must monitor progress and periodically deliver information about changes and the process.
● Tracking. Tracking claim payment patterns and pinpointing deviations are critical to prevention and effectiveness. Tracking these processes will help hospitals understand why payers deny claims to adjust for the future.
● Analysis. Analysis goes hand-in-hand with tracking to help hospitals identify weaknesses in the process that leads to denials. Determining denial reasons will help them enhance efficiency and decrease revenue loss.
These fundamentals once made denial claims processes slow, long, and fraught with errors. While it is one of the critical fundamentals of RCM, it has long been one of the most problematic areas that hospitals face. However, technology and software tools enable providers to get better insights into denial and act right away when they happen.
Healthcare data transformed patient care, helping providers innovate new treatments and personalize medicine to meet the patient’s concerns, conditions, and needs. However, extracting insights from this data is challenging. That is why an effective denial prevention process requires providers to leverage their data more effectively.
Better data capture and analysis will empower providers with the metrics they need for actionable insights. An arsenal of metrics offers a report card of sorts for the whole RCM process. It measures quality at each stage of the patient encouragement that could impact a claim.
Most hospitals have all the data they need to optimize and streamline their denials management. However, the right solution will help them capture this information and organize it to fuel insights and enhance decision-making. For example, many denials occur because the hospital’s patient information does match the payer’s database. A robust electronic medical record will prevent these errors by giving the administration more reliable insights and putting together all the information in a single, accessible source.
The more sophisticated your data capture and analysis is, the more hospitals can empower the entire organization with actionable insights to improve processes, revenue, and patient experience. Metrics and insights that matter will empower the whole staff with the tools they need to optimize and streamline the entire patient billing process.
While insights are powerful, many staff members are too overwhelmed to be able to take the time to act on them and prevent denial claims. Denial processes have long relied on outdated, manual practices. Not only is this more time-consuming, but it also leaves hospitals more vulnerable to mistakes and needing more transparency.
Automated claims processing tools reduce the potential for errors and free staff members to spend time ensuring that claims don’t have needless mistakes that result in a denial. Solutions will compare data to flag inconsistencies, pour through hundreds of pages to pull relevant codes, and track policy changes to ensure correct coding.
Manual and clumsy practices lead to increased denials. From staff burnout to difficulty retaining talent to poor performance, hospitals that rely on manual tasks and waste administrative time delay critical payments and increase the error rate.
No matter how great technology and processes are, they are only as effective as the team that supports and leverages them. If your team doesn’t feel accountability or ownership for the data and processes, then any move towards enhancing denial management will be a significant challenge.
Traditionally, getting buy-in from physicians is challenging because their focus is on patient interactions more than administrative tasks. Enhancing communication so that everyone sees the direct impact of the billing process on the organization and patients can enhance ownership and buy-in to optimized processes. For example, meeting financial goals is vital for investing in staff, technologies, and programs that directly influence clinicians.
Proactively preventing denial requires effective communication and collaboration between physicians, administrators, executives, and other staff members. Each team member needs to be educated on their role and how it impacts and connects to the organization’s goals. Effective education ensures that documentation processes and new approaches are understood and used correctly, so it doesn’t increase staff burden.
With the right tools and information, organizations can improve communication across teams to ensure that everyone works together to prevent denials. Sharing valuable data and holding team members accountable will facilitate better communication and promote ownership among staff.
A disorganized and manual claims management process puts the health of your hospital at risk. Leaders protect the financial viability of their organizations by using technology that optimizes and streamlines their approach to claims management.
Providers should look for automation tools that provide sophisticated automation and support implementation with a collaborative approach to prevent denials.
With the right tools, providers can avoid the downstream burdens of claim denials. It ensures that hospitals are paid promptly and patients receive transparent and efficient care even after they’ve left the doctor’s office. To see how GeBBS Healthcare solutions can help you prevent claims denials, visit gebbs.com today to request a consultation with one of our world-class experts.