New technology can play a crucial role in reducing claim denials if staff is trained to interpret and act on the insights it provides. To learn more about how healthcare organizations can develop sustainable and optimal denial management processes, Becker's Healthcare recently spoke with claims denial experts from RevSpring – Howard Bright, Chief Technology Officer, Patient Engagement, and Tim Bavosi, VP of Consulting – to explore how innovation is making denial management more effective.
Question: What are the biggest challenges that providers face in claims denial management today?
Tim Bavosi: The volume of denials nowadays is tremendous. The typical organization has between 5% and 10% gross denials. It's been this way since 2003, when 835 Electronic Remittance Advice files were initiated. With so many denials, organizations need a diverse team to root out the causes — they need expertise in registration, coding, billing and the clinical environment. It's hard to find and retain these people.
Howard Bright: Not only are payers denying more claims, but the barriers you have to jump over to avoid denials are getting higher. Organizations need more staff, because a higher percentage of claims are denied for complex reasons. The staffing required to handle these claims are like unicorns — they must understand all the various areas of healthcare.
Q: How can technology address these issues?
HB: It starts even before the visit or encounter. Technology can help by screening for the low-hanging fruit. Examples include automating common reasons for denials like verifying eligibility, checking to see if a prior authorization is required or determining whether a claim will fail medical necessity. Technology can handle those things without intake staff learning the ins and outs of denials. With a good patient intake tool, you can run quality edits that flag potential problems and identify how to fix them. Staff can address denials on the front end without even knowing that's what they're doing, if it’s built seamlessly into the process.
TB: Denial management technologies vary, but the majority streamline the analytics piece. Many denial products ingest the standard 835 EDI files from insurance companies, which carry rich information that tells the provider why a claim was denied or why it was paid then parse the EDI data and create analytics. In the past, staff used spreadsheets and other tools to manage that information manually.
Most technologies get the denial quickly, categorize it at a high level in terms of where it potentially originated and target certain denials like those associated with registration processes.
However, that's just the tip of the iceberg with denial management. No technology currently exists that automates the second step of denials. Technology can't perform the root cause analysis, drilling into the denial scenario, figuring out where the denial originated and identifying the solution. Those sequential pieces are critical to addressing denials and most of the work is manual. Some companies are heading in this direction, and I believe that will be the next evolution in technology.
Q: Can you describe the role of a skilled staff in ensuring that technology delivers value? Why is a commitment to people a key to success?
TB: Denials may be triggered from various places across the organization, such as materials management, a surgical procedure or a doctor's note. There are many places where critical data is collected and eventually gets on the claim. Most organizations have a denial team with people from different disciplines. However, you definitely need a senior leader at the top who understands registration, coding, billing, clinical integration and charge capture.
The next piece is articulating what's causing the denial scenario and designing a solution to prevent denials from recurring. We coach our customers about the value of documentation, denial templates and a defined process. EMRs are so integrated from clinical through financial. A template and a fixed process can help teams identify the unanticipated impact that process changes can have downstream. For example, if you touch a dictionary in one place, it will have a ripple effect.
Q: Looking at today's environment, what do the best-performing denial management programs have in common?
HB: The best programs build on themselves in a virtuous cycle. Gathering information about denial scenarios and using that to refine your systems creates continuous improvement. When your systems are all working together, that's when you really get to that value where one plus one equals three.
TB: Solid technology forms the backbone. Technology is critical for generating analytics and chasing the big dollars. You want to focus on denials that have the greatest impact on compliance or revenue. You also need an educated, ambitious and consistent staff working on denials. Organizations also must follow a defined process, utilize denial templates and monitor the impact after implementing a fix. The best performing teams celebrate wins and reward staff.