“Prevention is better than cure”. This strategy can also be applied when managing medical claims. However, gone are the days. When medical practitioners were used to handing over the claims management to the existing staff with zero to little knowledge. Now things have changed.
The latest evolutions in the healthcare industry have completely changed the way of managing medical billing services. For instance, strict policies established by the payers, regulatory changes, ever-evolving billing guidelines have made the RCM process extremely complicated.
It has been estimated that medical practitioners lose significant revenue due to inefficient management of denied medical claims. Unfortunately, approximately 65% of denied claims remain unattended and never being appealed.
As a result, healthcare practitioners lose their hard-earned revenue permanently. Which leaves a negative impact on the bottom line of your medical business.
Moreover, the reworking on denied/rejected claims requires extra time, money and efforts. It’s overwhelming and increases the administrative burden of the healthcare providers when it comes to resubmit the claims after rectification.
Therefore, instead of spending time and money on denial management, medical practitioners are focusing on denial prevention strategies. Because this trend gives a boost to the medical claim first-pass acceptance ratio. It also gives you long-term and sustainable financial results.
In addition to this, moving towards the denial prevention trend reduces the administrative as well as a financial burden. For instance, the rework on the denied claims costs an average of $25 per claim. Imagine the total costs, if your healthcare practice sees denial rates ranging from 15 to 20%. Then imagine the cost of appealing every single claim.
Shift Your Focus To Denial Prevention
Over 80% of claim denials can be prevented. Healthcare practitioners should identify and fix the inefficiencies in each step of the revenue cycle management. Such as: patient’s scheduling, registration, clinical documentation, medical coding, charge entry, claims submissions and accounts receivable management.
Effective denial prevention is a systematic procedure. That includes the hiring of a well trained medical billing team, root cause analysis and finding solutions to stop the recurring in the future.
Here are the following tips which can help you to shift the focus from denial management to denial prevention. Let’s understand them in detail:
1. Train Your Staff For Success
Have you decided to take proactive measures to adopt the trend of denial prevention? Then you must focus on building a team of highly trained medical billers, coders and ar recovery experts.
The growing complexities in the field of medical billing and coding, require a unique set of skills and expertise. Therefore, you need to invest in building a dedicated team. That has extensive experience to avoid a significant dent in an organization’s financial health by improving the clean claims rate.
Moreover, make sure that your denial prevention workforce undergoes constant training. So they can stay up-to-date about the latest healthcare reforms. In addition to the back-end team, you must hire a reliable registration staff. Because they play a crucial role in medical billing services.
No doubt, managing an in-house medical billing team can be a challenging task for healthcare providers. Because it requires a significant amount of money and time. Medical practitioners who are already struggling with financial crisis find it difficult to afford the expenses of the in-house billing department.
However, if you are one of such practitioners, then you must consider outsourcing medical billing services. In this way, you acquire the assistance of highly trained billers and coders at lower costs.
You can get rid of the excessive costs like deployment of billing staff, constant training of billers, installation and maintenance of software/hardware etc. While in return, outsourced billing specialists help you to prevent future claim denials and also reduce the days in the medical accounts receivables.
So, whether you outsource or not, you must have a highly experienced team in place to ensure denial prevention.
2. Analyse and Categorize the Root Causes
A medical claim is denied/rejected when insurance companies don’t accept the claims due to certain reasons. Incorrect patients’ personal as well as insurance information, wrong medical codes, late filing and duplicate billing can result in claim denials.
So, in order to prevent claim denials in future, it’s crucial to have a better understanding of the most common reasons. For this purpose, your billing team should analyse the denied claims and make a list of the major factors behind such occurrence.
Understanding and categorization of the root cause will enable you to see the issues at an aggregate level. Below is a list of the most common issues that can result in claims denials.
2.1. Scheduling – Patient registration
- Lack of prior authorization
- Medical procedures or treatments are not covered by the insurance companies.
- Patients insurance eligibility issues.
- Physician credentialing issues.
- Missing/incomplete patients information.
2.2. Medical Documentation/ Coding
- Lack of Medical Necessity.
- Inadequate patients’ records.
- Lack of adherence to AMA guidelines.
- Medical codes for the most expensive/ less expensive healthcare services than actually performed.
- Unbundling issues.
- Incorrect modifiers.
2.3. Billing Errors
- Inappropriate management of cross over medical claims.
- Insufficient information on medical bills.
- Data entry errors.
- Duplicate billing.
- Failure to submit the claims in a given time window.
3. Implement Innovative Solutions
Once you uncover the areas of improvements in the existing revenue cycle management. You become able to fix such efficiencies by taking appropriate measures. So after identifying the root causes of claim denials, you should implement innovative medical billing solutions.
To eliminate the inefficiencies of the front desk procedures, you should automate the manual method of data collection and processing. For this purpose, the implementation of Electronic Health Records is the best solution to increase the effectiveness of medical documentation. EHR enables you to keep patients’ records digitally. So you can access the most accurate data at any time.
Furthermore, in order to prevent the claims denials due to billing errors. You should stop using orthodox methods to prepare and file medical claims. Because such techniques always leave a huge room for errors and result in claim denials. Therefore, you should implement electronic billing solutions, that reduces the chances of data entry and other human errors.
Moreover, make sure that coders translate the patients’ diagnosis and medical care services into standard medical codes accurately. Hence, before claims submission, you should review the claims to catch possible errors that can later result in claim denials.
Thus by adopting the above-mentioned techniques you can easily build an effective denial prevention system. That is the surefire way to optimize the revenue cycle management.
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