Claim denial prevention and management is crucial for a hospital's financial health.
Without an effective approach, organizations may lose or experience delays with reimbursement. A Change Healthcare study found a typical health system could lose as much as 3.3 percent of net patient revenue, an average of $4.9 million per hospital, due to denials.
That's why "it's really important that you take a look at processes, take a look at what you can do to mitigate and prevent as much of that as possible because a lot of [denials] can be preventable," said Carmen Sessoms, associate vice president of Change Healthcare's revenue cycle management advisory services program.
Ms. Sessoms and Tony Rinkenberger, revenue cycle director at Ridgeview Medical Center in Waconia, Minn., discussed denial prevention strategies during Becker's Hospital Review 4th Annual Health IT + Revenue Cycle Conference.
Three takeaways:
1. Denial causes. The largest percentage of denials (24.8 percent) are associated with patient registration and eligibility, according to 2017 data from Change Healthcare hospital customers. That's more than the percentage associated with missing or invalid claim data (14.9 percent) or authorization/pre-certification (11.6 percent). To address front-end patient access processes, Mr. Rinkenberger recommended using a tool that audits registration data before submitting it to the patient's payer.
2. Documentation. Denials can also originate in the middle of the revenue cycle. Mr. Rinkenberger said hospitals should educate physicians and the coding team on documentation issues that can result in denials. He also recommended bringing the patient into the coding process through price transparency tools since patients may need to know medical terminology or specific codes to look at price estimates.
"Look at the tools you have now that are payer-centric and make them more consumer-centric," said Mr. Rinkenberger.
3. Categorization. While many denials are preventable, some are not. Mr. Rinkenberger said hospitals should categorize codes based on preventable and nonpreventable scenarios to ensure revenue cycle staff aren't wasting time on the nonpreventable denials.
"That is where you get the biggest bang for your buck, making sure staff are working on the preventable denials," he said. "For example, verifying coverage at scheduling and registration should be second nature for staff and will prevent denials for known coverage changes, preventable. However, providers can't anticipate retro terminations by payers; those are unpreventable denials that just have to be worked."
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