3 Easy Steps to Minimize Medical Claims Denials

Anthony Carabello, CEO of AR Logix, Inc.

According to the MGMA 2009 Cost Study, the average number of rejected claims for a medical practice is about 30 percent and, of these claims, nearly half are never resubmitted. This means your practice may be missing out on nearly 25 percent of uncollected revenue by not having control over the claim submissions and billing processes.

The easiest and fastest way to regain control of your practice’s expenses and improve cash flow is to take precautionary measures to reduce claim submission problems and denials.

Below are several helpful tips for medical practices looking to decrease and prevent denials.

1. Be proactive. Constantly analyze claims submission reports.

Handling claims denials can be a complicated and time-consuming process, but understanding the reasons why medical claims are denied can prevent the amount of denials that your office receives.

Possible reasons for claim denials include:

• Patient identifier information is incorrect or missing – this can include the spelling of the patient’s name, their date of birth, and/or insurance policy or group numbers
• The patient is no longer eligible for coverage
• Authorization/pre-certification is required prior to the patient’s appointment
• The visit requires a referral from the patient’s primary care physician
• Services are not covered by the patient’s insurance provider
• The claim was not filed with the patient’s primary insurer
• CPT and/or ICD-9 codes are missing or invalid

In order to identify trends in claim denial submissions, it is important to analyze each denial received and the explanation provided. Healthcare professionals should conduct regular audits and monitor claims submission reports on a weekly or monthly basis. Many revenue cycle management companies use denial management software to assist the process. This software can categorize denied claims based on the reason for denial, making it easier to identify and address problem areas in the claims submission process.

2. Get to the root of the problem and outline prevention tactics.

After identifying the main source (or sources) behind the bulk of your practice’s denied claims, it is essential to take action in preventing denials in the future. You can start by educating your staff on best practices for filing a claim and outlining steps for reducing preventable mistakes. Provide employees with a checklist, for example, to ensure that critical steps in the revenue cycle are not being left out. What might some items on the checklist be?

• Verify patient insurance, request authorizations and pre-certifications at least 24 hours before a scheduled appointment. By doing so, your practice can minimize delayed and denied claims. Additionally, if you find out a patient’s coverage has been terminated ahead of an appointment or if their insurance provider will not cover a certain procedure, you have time to inform the patient so they can reschedule, or be prepared to pay at the time of service.
• It is best practice for front desk staff to reconfirm patient demographic information during registration for every appointment, and when needed, update the information.

3. Standardize the resolution process.

Given the millions of dollars in lost revenue each year for healthcare organizations due to denied claims, it is imperative to have an established plan outlining how your employees should prevent and assess denied claims. For example, it is recommended that appeals get sent out within 48 hours. If your practice does not have the resources to file claims resubmissions in a timely manner, you may choose to work with a revenue cycle management company.

Remember, a denied claim is not a lost cause. You may need to invest more time and effort into getting the claim approved, but this will eventually lead to an increase in cash flow and ultimately will improve the financial well-being of your organization or medical practice.

About AR Logix, Inc.

AR Logix, Inc. is a holding company for three industry-leading companies, OutReach, Berks Credit & Collections, and Collector University, that partner with medical providers and hospitals to assist with key components of the revenue cycle. Through these companies, AR Logix, Inc. uses advanced technologies, industry analytics and trends, and a professionally trained staff to create efficiencies within a medical practice or hospital organization.

For over 23 years, Anthony F. Carabello, CEO & President of AR Logix, has been working with hospitals, physicians groups and healthcare providers in the area of collecting more money at the time of service, as well as managing their account receivables. His knowledge and expertise allow him to educate, challenge and motivate medical professionals with the tools they need to be successful with their organizations.