When it comes to managing denials, Michelle Katz has a golden rule: be persistent and document everything. “Documentation is key and it’s a big pain in the butt, but it needs to happen – from all sides,” said the healthcare advocate and nurse who works with mental health patients.
Managing denials is a challenging prospect for providers – whether they be independent doctors’ practices or health systems – but experts say there are steps to make the process more efficient and more likely to be successful.
[See also: Top 5 medical claim denials]
Denial management is a complicated issue, said Brian Sanderson, managing partner of the healthcare services group of public accounting firm Crowe Horwath.
“What’s very important in understanding denials is where do they stem from? What is the root cause?” he said.
While the reasons for denials run into the thousands, many are derivations of the same theme, he said. Top reasons for denials include:
- service denials – where a clinic continues to bill for a service after a patient has reached maximum allotment for that type of service, say 10 physical therapy visits
- authorization denials – where proper authorization was not obtained before service was rendered
- eligibility denials – where the insurance information on file for a patient’s insurance turns out not to be current
- medical necessity denials – usually associated with Medicare but increasingly private payers are setting clinical standards to meet before covering
Sanderson said the first and most important thing provides should do to effectively and efficiently handle denials is to do a complete denial analysis. “(Providers) need to understand how much work it’s taking to resolve denials and how much revenue risk there is based on how much you’re writing off,” he said.
Once providers have that understanding, they need to examine the principal reasons the denials are occurring – for example, maximum benefits are exhausted – and where they’re occurring – the emergency department, surgery, radiology, etcetera. “The only way you’re going to stop the denials is to go right to the source of where these are occurring,” he said.
While Crowe Horwath offers its clients a “denials program in a box,” which, in addition to resolutions processes and prevention methodologies, includes an electronic tracking tool, Sanderson said technology tools aren’t really necessary to have effective denials management.
“A lot of organizations … they’ll buy a tool and they think that’s what does it,” he said. “The tool by itself never works. The tool guides you to what kind of operational change you need to make to prevent and resolve denials. I’ve seen organizations go without a tool, focus on the prevention and resolution and have a lot of success.”
Zac Stillerman, on the other hand, thinks technology tools are vital to providers’ denial management processes.
“It’s so important to be able to use analytics to figure out where you have the biggest problem,” said Stillerman, executive director of revenue cycle solutions at The Advisory Board Company. “ … without really good knowledge and really good analytics on where the problem is, you could end up spending money on solving the wrong issue.”
Finding the root cause of denials – tracking where, why and how they are happening – is a tough job, Stillerman said, and technology tools give providers a huge helping hand. They allow providers to see patterns and drill down for a better understanding of what is happening, and they allow for efficiencies like automatic flagging of recurring issues, matching identification codes that come in from various payers and real-time connectivity.
“We’re not going to tell you that technology is the solve for everything and the only way to get to the answer, but I think it’s a big key part of the solution in addition to the staff and the processes,” said Stillerman’s colleague, Kate Stets, director of revenue cycle solutions at The Advisory Board Company.
From Stets’ perspective, a key solve is actually not to have to solve denials at all. “I’m a huge fan of prevention because when you look at the hard statistics, the back end typically is only overturning 50 percent of denials even though 90 percent are preventable,” she said.
She said prevention best practices include:
- Training staff to hit the target of a financially-cleared patient – that means before a claim is submitted, the patient’s eligibility should be in place, any authorizations should be in hand and a conversation with the patient about out-of-pocket responsibilities should have taken place.
- Educate staff – Make sure that front-end staff and back-end staff are communicating, and better yet, have staff work a denial from start to finish so self-correction can take place.
- Emphasize financial clearance rather than pushing volume – if providers are not getting the right data on patients ahead of time ensuring financial clearance, they won’t necessarily be getting good volumes because they’ll be getting more denials than payments.