Do you have a denial management solution at your hospital? Claim denials are burdensome from multiple perspectives—they impact an organization’s revenue and create added stress for a health system’s billing staff. The American Medical Association states that 1.38 to 5.07 percent of claims are denied on the first submission. While this seems like a small figure, when considering the volume of claims submitted by a hospital or health system, the totals add up quickly. In 2018, SSI processed over 560 million claims on our clients’ behalf, which could equate to as many as 28.4 million denied claims.
Last year, RevCycle Intelligence reported that “Delayed payments stemming from claim denials are significantly impacting hospital revenue cycles, taking an average 16.4 more days to pay compared to claims that have not been denied.” Becker’s Hospital Review has reported that large hospital claim denials average around 7.8%.
Given the statistics—and the opportunities—now is the time to become more proactive with your denial management efforts. It is no longer a best practice to stamp the claim form with “APPEAL” and send it back in. Not to mention, automatic re-billing doesn’t help and could be adding significantly to the workload for your staff. So what’s the next step? You’re probably ready to reap the benefits of a denial management solution at your organization…that is, if you don’t already have one in place. But how do you know for sure? Read below for the signs it’s time to get the ball rolling.
Your organization is relying on manual processes to manage claim denials.
If you’re using spreadsheets or another manual means to manage denials, you’re at a clear disadvantage. Your team is not working efficiently nor are you able to automatically route certain types to denials to specific associates. Denial management software allows your employees to sort work list assignments by reason, time, dollar amount and other attributes. With this ability, staff is enabled to take a proactive approach to the work and spend time on claims that have the highest impact.
You do not have the ability to view claim denial trends.
Sure, your processes allow associates to tackle the denials on-hand but do you have the ability to spot trends? Think about what would happen if you could see, in real-time, your organization’s most common reasons for denials, determine payers with the highest denial rates, gauge the success of resubmitted claims, view the amount of adjustments, and more. If you could access these items, you would be able to strategically deploy resources, gain insight on where training is needed, and ensure your billing department is appropriately staffed.
You can’t get to the root cause of denials.
Identifying the root cause of denials is integral to effectively working a claim. Payers return unpaid claims with a claims adjustment reason code (CARC) applied at the CPT code level, with further explanation acquired through an accompanying remittance advice remark code (RARC). But that doesn’t necessarily make things easy. As you are likely aware, payer feedback isn’t intuitively mapped nor is it clear. Your staff practically needs a crystal ball to interpret non-standard or legacy codes used by some payers. All of this takes time and resources to figure out—claim by claim.
You have no understanding of end-user productivity.
If, at the management level, you have no insight into the productivity of each associate, you cannot effectively manage the team. For optimal performance, you need to be able to gauge workload, denials worked, success rates and more. As budget cuts become a normal way of life, you need the ability to have the numbers necessary to justify your resource count.
Do you identify with one or more of the items listed above? We can help. SSI’s denial management solution is built into Claims Director, our claims management platform, and allows users to easily identify, monitor and minimize the impact of denied claims. Learn more here. Read additional articles with strategies and tactics for denial management.