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Ways to Avoid Claims Denials

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Ways to Avoid Claims Denials
  • January 30, 2024
  • Medical Billing
  • Kalpesh Soni

Despite relentless efforts to curb the growth in denied healthcare claims, physician practices see between 5 to 10% of claims continue to be rejected by commercial and public payers each year. Each claim costs to rework, it pays to get them right the first time. For health systems, physician groups, and billing companies in claims management not only erode revenue and crush staff productivity but also represent a source of major worry for providers. Yet below are the places to focus to avoid those rejections. Claims are commonly denied on the basis of:

  • Missing, incorrect, or duplicate information
  • Incorrect codes
  • Inclusion of service, drug, or charge that isn’t covered by the patient’s plan
  • Missing pre-certifications or authorizations
  • Missed filing deadline

With the right strategies and tools, providers can optimize their revenue cycle to make sure claims are right the first time.

A three-part strategy to eradicate avoidable claim denials

1. Dive into the data to find and fix the leaks

To reduce denials, providers should start by analyzing denial and audit data to pinpoint where the errors are creeping in. Tracking denials by volume, type, payer, and reason allows providers to understand the most frequent root causes. Business intelligence tools can then use these insights to help providers discover whether the vulnerabilities are attributable to people, workflows, technology, or data.

For example, is there a department or service line that seems particularly exposed to denials? Or has there been a surge in rejected claims following a change in payer policy? The goal of both retrospective audits and ongoing monitoring of claims processes is to identify those trigger points, resolve problems quickly, and prioritize solutions to prevent future denials from occurring. If one gets answers to these, they no longer have to wait 30 to 45 days to review denials. They can review them on the day of submitting if they choose.

This real-time monitoring helps connect front- and back-office staff for a more efficient overall system. Immediate feedback on what happened and how it might be prevented in the future helps both ends.

2. Assign the right work to the right specialist

The processes and criteria for submitting claims are complicated. Payer rules are changing, and as payers rely more and more on sophisticated algorithms to check for errors, they’re becoming more efficient at rooting out inaccuracies and rejecting claims. With increasingly complicated criteria and varying requirements in payer contracts, it’s becoming more challenging for providers to submit accurate claims the first time around.

To meet this challenge, providers need to ensure their own processes are similarly efficient. From patient access to patient accounting, automated workflows can help improve patient matching, reduce billing errors and free up staff to make the best use of their time.

Crucially, that means assigning the right person to the job. Some providers also segment claims staff by care setting or payer, which allows them to become extremely familiar with the nuances of specific types of claims. Again, data analytics can help providers determine the appropriate level of specialization.

3. Improve communication with payers

High volumes of denials are a burden for payers, too. When the same errors appear repeatedly, payers must dedicate extra administrative resources to reprocess corrections and appeals. Effective contract management with payers can help providers stay up to date with each payer’s specific requirements and formatting preferences to avoid such errors as well as monitor payer performance to check for patterns in denials.

To achieve this, providers need to look at everything from improving patient matching to understanding exactly what payers are asking for in claims submissions. A good claims management strategy will take a holistic view of the revenue cycle to see where improvements need to happen, and implement the right processes, tools, and technology to drive down denials.


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