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15 Ways to Prevent Claim Denials

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90% of claim denials are preventable. Of those, around 24 percent of claim denials are due to errors during front-end revenue cycle processes, around 12 percent of denials are due to authorization/precertification mid-cycle processes, and around 15 percent are due to invalid claim data in the back-end. That’s a lot of money healthcare organizations and entities are betting on to increase their revenue.

By breaking down those percentages, we can draw the following conclusions…

  1. Determining whether or not a claim will be paid or denied has a lot to do with what happens before the patient walks through the door.

  2. Back-end denials occur due to lacking front-end procedures

  3. Determining if something is medically necessary can cause significant denials

What should you do to prevent claim denials on the front-end, mid-cycle, and back-end? By engaging our best practice clients and reviewing data from our own denial management system and have come up with 15 ways to prevent claim denials.

Front-End Denial Prevention

  1. Educate Your Staff - No matter what organizations tell you about their automated insurance eligibility or verification tools, denial prevention starts with your staff. Front-end staff is often unaware of the expenses associated with front-end denials as the majority of their time is attributed to streamlining the waiting room. But nothing can replace a knowledgeable staff and a solid pre-visit process. Your staff needs to be able to navigate the nuances involved with customer service as well as know how to interpret different policies and discuss patient’s coverage issues.

  2. Establish a Front-End and Billing Partnership - The relationship between front end office and your billing team should be treated as a partnership. Although the majority of denials can be attributed to the front-end office, the billing office needs to identify missteps and inform the front office.

  3. Establish Consistent Checks on Demographic Information - During scheduling, establish a follow-up process two or three days prior to a patient visit to verify insurance and collect demographic information. Then review those details again at the time when they walk into the door for their visit to ensure that their phone number, address, or other information has changed.

  4. Patient Scheduling - Ask the patient questions regarding the details of their visit during the registration phase so you can better schedule the type of appointment and length of the visit. As an additional step, check on prior visits a patient has had that’s covered annually to make sure it is covered at the time of service and verify coverage through eligibility.

  5. Implement Price Transparency - Research and look for tools that are often available through insurers that provide an estimate of the cost of an upcoming service or procedure. These tools, such as eligibility verification, base their costs on a patient’s benefits and historical claim data. Price transparency can educate patients about what their financial responsibility so there will be fewer surprises when it’s time for billing.

  6. Time Management - When a claim is denied, you usually have a 90-day window to rework and resubmit it. Delays in re-submission usually occur due to the process involved with reworking front-end denials because you have to spend time researching the mistake, updating the claim, and resubmitting it. If you do not have proper time management put in place then you run the risk of not getting paid.

  7. Establish a Daily Claim Submission Schedule - Keeping up on claims and submitting new ones each day is a best practice to ensure A/R days are accurate and will allow the appropriate amount of time to identify any mistakes that may be occurring prior to claim submission.

  8. Implement a 24 Hour Edit Window - Inability to identify coding or charge entry errors prior to claim submission results in claims being rejected by the payer. This means that you need to establish a streamlined, internal process to work through edits and correct claims within a 24-hour time frame before submitting to your clearinghouse.

  9. Utilize Claim Scrubbing and Edits - Revenue Cycle Solution organizations, like ourselves, have created solutions that applies appropriate edits to your claims, including National Coverage Decisions (NCD), Local Coverage Decisions (LCD), and Correct Coding Initiactive (CCI). Additionally, these solutions will allow you to request custom edits, which can filter and highlight mistakes then place affect claims into a workqueue for correction.

 
 

Mid-Cycle Denial Prevention

Denial prevention is largely handled in the front-end and the back-end. However, there are steps you can take in the mid-cycle of the revenue cycle to optimize performance. Having a strong mid-cycle requires a skilled team of HIM professionals. If your team of HIM professionals does not possess the necessary skills they can be the root cause of denied claims.

  1. Review Medical Codings - Coding is a huge portion of mid-cycle procedures. Medical coders are experts in documentation review, code assignment, and appropriate code description interpretation. Coders assign procedure codes for surgical procedures and all diagnosis codes. These codes are hard-coded in a Charge Description Master (CDM) and assigned to the claim based on a department level selected charge code. In order to ensure medical codings are accurate and correct, you should consult coder’s expertise when setting up the CDM.

  2. Establish Compliance - Compliance is operating in the background of every step of the revenue cycle. It is especially present during mid-cycle phases as code assignment and compliance go hand-in-hand. Compliance has a role in documentation, chargemaster set-up, charge capture, and claim processing. It’s paramount that you ensure your organization has policies and procedures that outline the organization’s commitment to compliance and describes revenue cycle functions.

  3. Proper Documentation - Poor documentation practices have a direct effect on losing revenue. Implementing a sound strategy on handling documents appropriately, whether manually or using an automated tool, will eliminate rejections.

Back-End Denial Prevention

  1. Separate Denials into Buckets - Ensuring that claim report data is properly interpreted and denied claims are separated into ones that are preventable and others that need to be managed when they occur will streamline your denial management process.

  2. Root-Cause Analysis - Track denied claims for missing information to the source they came from to more easily determine what happened.

  3. Automate Forms and Letters - healthcare revenue cycle organizations have built entirely integrated solutions that automatically fill appeal forms and letters to save time.