5 ways to get claims denials under control

In an era of shrinking reimbursements, it's more important to capture every dollar owed to your practice as far forward in the process as possible. It's a matter of time and money.

According to a 2016 Kaiser Family Foundation study, average deductible and co-insurance costs have seen the biggest increases between 2004 and 2014, and continue to grow while copays are continuing to decline. The shift toward high deductible health plans has fueled that rise. The amount of receivables owed by patients has surpassed 30% and is forecast in 2018 to surpass 50%.

With patients paying more out of pocket for their healthcare, hospitals and medical practices are correctly focused on improving patient collection processes and collecting patient responsibility at the point of service. At the same time it's important not to lose sight of the other side of the revenue equation—the insurer's responsibility. As reimbursements shrink, capturing every dollar that's owed to you is critical. To do this, you need to make sure you are effectively managing your claim submission process and post-adjudication denials.

In a constantly shifting landscape, there are some principles that remain constant. Elizabeth Woodcock, MBA, FACMPE, CPC, a leading expert on medical practice operations and revenue cycle management, shared her perspective on what physician and medical practices need to focus on.

1. Make wise use of your clearinghouse!
A strong clearinghouse should not only route and submit your claims they should have filters / edits that check claims for formatting issues and missing data and reject claims prior to submission if these issues occur. You should ensure that your claims are appropriately sent from your practice management system, received by the clearinghouse, sent to and received by the payer and accepted into the payer adjudication system. At each stage in the process you should be alerted to the status of your claims.

2. Create Protocols for Identifying and Managing Denials
But just because denials are a fact of life, doesn't mean practices should just throw up their hands. Woodcock believes there is a lot more they could be doing, and it starts with paying closer attention.

"Identification is where the biggest problem lies," she says. "We think everything is going well because there's money in the bank. We don't think anything is wrong because we're not digging in and identifying." When claims are denied, you need to quickly determine why. If the payer has changed a rule and that is triggering denials, the sooner you know about it, the sooner you can address it.

As part of the identification process, you also need to establish a closed-loop feedback system with teams upstream in the revenue-cycle process. Leverage the ability to create pre-submission claim edits in your practice management system or with your clearinghouse where possible once reasons for denials are identified. If a denial is the result of a pre-authorization, you want to make sure that the information is known in advance. Also be sure that the patient access teams know that for a certain procedure payers are now requiring pre-authorization. Teams need to account for that immediately.

Armed with an understanding of why the claims were denied, you then need a standard approach to managing them. Depending on the size of your practice, there may be hundreds of different types of denials. The ideal is to stop denials before they occur. However when they do occur, how will you work them? Some practices manage denials by payer, while for others it's the type of denial. From there, you need to get the denials into the appropriate work queues and establish timeframes for completing them. Within each category of denial you should have action steps for the employee to take, including a standard process for coming to a resolution. Whether it's writing the claim off, taking an adjustment, or submitting a corrected claim.

3. Automate as Much as Possible
In the not-so-distant past, managing denials involved a printer, a highlighter, a copier, and some sticky notes. Woodcock recalls how practices would print off all of the remits, highlight the denials, and then make and distribute copies with notes to staff on how to handle. But with hundreds of thousands of transactions processed each day, this approach is no longer feasible.

"Practices need to pivot and focus on every opportunity to automate," says Woodcock. "Don't pick up the phone unless you have to. Most payers allow processes to happen online. They don't have the staff in their call centers to handle you, so even if you do call they're not going to be there to answer the phone."

4. Create Processes, Document Them, and Train Employees on Them
If your practice doesn't have a documented protocol for working denials, develop a program to do just that. Sit down with your employees and record all of the steps they take to work a claim. It can be a tedious process, but the results will be worth it.

"It's a wonderful way to ensure you're holding employees accountable for what you assume is happening," says Woodcock. "You're developing an awesome orientation and training manual that can be used for many years, instead of just relying on tribal knowledge."

Denials, at some level, may be a fact of life, but they can be managed. By committing to an effort and recognizing that it's a day-to-day process, you have the building blocks necessary to streamline processes and optimize revenue.

5. Accept that Denials are a Fact of Life
When we want to improve a process, our first instinct is to figure out how to prevent a negative action from occurring and this is appropriate. But with denials, no matter how good your practice's workflows are, or how experienced your front-office staff is, denials at some volume are simply a fact of life.

"The nature of denials is in constant flux," says Woodcock. "Once you get good at something, the mix changes. This area can't be mastered from a prevention perspective."

She notes that denial trends are related to the changing reimbursement landscape, and she is seeing more related to medical necessity and experimental treatment. Denials hinge on payers' reimbursement protocol, and those protocols change constantly—often without warning. With remittance analytics tools practices can learn why denials are occurring, for what reasons and for which payers. With data in hand there are ways that practice management systems and clearinghouses can support up front editing for these situations before claims go out the door. While this is retroactive at the beginning it forms the basis for 'closing the loop' and allows practices to get ahead of the curve with a reporting process.

Along with medical necessity denials, practices are also seeing an increase in pre-authorization denials. The challenge, once again, is that practices often don't realize until after the claim has been denied that the payer changed the rules. The practice might have previously submitted claims with that same procedure and received payment, but then one day—out of the blue—the claims start being denied. Authorization automation is available is advance of a patients appointment to understand these rules before the service is offered.

"It would be beautiful to get a list from the payer at the beginning of the year that says if you bill these two combinations, we will deny these services," says Woodcock. "We don't get that list. It's what makes denials so challenging because you're really in the dark until you get to that transaction, and then you have to look at that transaction and figure out what to do with it."

Colleen Wood, is Vice President, Eastern U.S, Revenue Cycle Solutions for Availity.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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