Q&A with a Revenue Cycle Expert on Key Denial Management Strategies

SSI Claims Denial Management Series: Part 3 of 3

May 24, 2022

In Part 1 of the SSI Claims Reporting & Management series, we explored the top two KPIs to keep an eye on. In Part 2, we explored the five most common types of medical claim denials and smart steps you can take to avoid them. Closing out the series in Part 3, we’re talking with one of SSI’s own specialists on claims reporting and denial management to explore key strategies to help healthcare organizations improve their denial management operations.

Lori Brocato is SSI’s Vice President of Product Management. She has extensive expertise in healthcare EDI, revenue cycle denial management, and healthcare data exchange applications. Follow along as we speak with Lori about quick wins, tracking and monitoring denials, and her recommended strategies for common situations.

Q – What are some key strategies in the medical claims denial management process for quick wins to improve CCR and IDR?

A – [Lori Brocato] I’d be remiss if I didn’t spend some time here talking about edits.

First, it’s essential to keep an eye on your edit trends and look for changes month over month to determine what effect your edits are having on both your CCR and IDR.

Second, look for edits that are no longer applicable and turn them off.

Third, if you have any “catch-all” edits in place, take a look at those and see if it’s possible to break them down further and make them more specific. These first three steps alone should equal a more efficient use of edits on the front end, which typically helps improve claims management down the line.

Fourth, look for bypassed edits and understand why they occurred to determine if you can make any significant or subtle changes to these edits that might have a significant impact downstream. Lastly, even if your organization doesn’t have a lot of resources to monitor and manage your edits, you may find that even setting aside a small amount of time weekly or monthly to review and tweak here and there, those small changes could equal big results.

Q – Are there any quick-win claims denial management strategies that come to mind regarding specific types of healthcare denials?

A – [Lori Brocato] Yes. The first one that comes to mind has to do with timely filing denials or what is sometimes called never denials. This may not be the most common type of denial, but we often find ignoring these types of healthcare denials still equals money left on the table. And for those that are recoverable, it could be a simple, easy fix.

I suggest starting with those payers that are the main drivers behind these denials and then focusing on those representing the highest dollar amounts (which is true for all healthcare denials). Take a look at specific claims, codes, dates, and more to try and uncover the how, what, and if you can make changes that would help you avoid these types of denials. I also recommend you schedule weekly reports utilizing your billing and reporting system to help you identify claims nearing the timely filing deadline and include the payer as a filtering field.

The second type of denial that comes to mind is eligibility-related healthcare denials, which fall within the top five most common denials. I believe more strategies could be applied to address issues upstream to reduce these types of denials on the back end.

For example, take full advantage of your billing vendor’s edits. At the time of billing, be sure to re-verify eligibility to make sure the coverage is still active, or you have the correct payer, etc. As we all know, eligibility information can change from when you first collected it. This extra step alone can save significant time and money on the back end.

Any denial you can correct and resubmit quickly is a quick win in my book.

Q – What claims denial management advice would you give to those seeking help to prioritize working their denials?

A – [Lori Brocato] The lowest-hanging fruit are those healthcare denials that you can correct and resubmit quickly. So, that’s a good starting point. From there, I’d take a look at prioritizing repetitive denials that might have a simple fix. Is there something these denials have in common that you could fix by implementing a change in your host electronic health record system or that might be able to be automatically plugged in during the download of claims into your billing vendor’s system? These are things that could fix a lot of errored claims or a lot of claims that are denied for the same reason.

I also recommend using your system’s flags, edits, reminders, etc., to address issues, especially those around timely filing. Most systems provide notifications that can let you know when you’re reaching a timely filing limit, and I highly recommend people take advantage of those notices.

Another option is to workflow your healthcare denials. There’s technology out there, including what we offer here at SSI, that allows you to automatically assign denials to a resource that can best address them. Then, organizations can assign denials to root cause owners based upon where the denial is coming from. It makes sure the best person in that area of expertise is the one who addresses it. This type of workflow also helps educate resources when they can see what errors are occurring and become empowered to implement strategies to help prevent those specific errors from recurring.

Technology also allows you to prioritize high-dollar healthcare denials above lower-dollar ones, especially high-dollar denials that may have simple, quick fixes. You can even use different workflows to address appeals specifically and prioritize them based on the level of complexity and determine who is best to handle each type.

Ultimately, everyone works healthcare denials slightly differently, and it’s essential to find what works best for you and your organization. Some organizations use the same staff to handle billing and denials. Others separate these functions from those focused on follow-up only (rejections, denials, and appeals). And some send healthcare denials back to the department or area responsible for the denial. And in some cases, organizations completely outsource their denials.

Q – Are there any specific claims denial management strategies you recommend around reprocessing claims and filing appeals?

A – [Lori Brocato] I think it’s crucial to use electronic submission for reprocessing claims and, in some cases, even filing appeals, which gets the claims there faster. And you want to be sure to follow payer-specific guidelines for claims resubmission. For example, some payers require you to submit a corrected claim with the XX6/XX7 bill type, and others don’t care, meaning you can just correct the original claim and rebill it. Knowing these guidelines is really important because if you don’t follow them, you’ll just end up with another subsequent denial.

A lot more payers have started offering the ability to file appeals online, or they’re at least allowing you to begin the process with online forms. In addition, Medicare recently rolled out their Electronic Medical Documentation Requests (eMDR) process, where they are electronically sending out requests for medical documentation for their Recovery Audit Contractor (RAC) audits and other types of audits. So they are getting closer to having a fully electronic process, and I’m seeing a lot of other payers moving in this direction as well.

Q – Do you have any claims denial management tips for tracking and monitoring new denials?

A – [Lori Brocato] You should definitely have a monitoring or tracking system in place that helps catch new healthcare denials. You don’t want them to become commonplace, so catching them quickly is vital. In the absence of a technology vendor, you will want to be sure you can keep up with new payer requirements, read your provider bulletins that you get from your payers, check payer websites, etc., but hopefully, you’re working with a technology partner who does all of this for you.

However, even if you are working with a technology partner and a new denial does show up, the first questions I would ask myself are, “Is this a new payer requirement, and is this something I need to get an edit put in place for?” or “Did my organization just sign a new contract with a payer and is it possible there’s something new in the contract that we should be accounting for?”

Q – How do risk-based agreements affect claims denial management and appeals?

A – [Lori Brocato] When it comes to managing claims and denials associated with risk-based agreements, it’s essential to work closely with your clinical team to ensure claims are accurately coded since you can have monies tied up in them for treating sicklier patients. Organizations want to make sure they continuously document those patients for the conditions they’re being treated for.

In some cases, it just won’t be worth appealing the claim. For example, maybe you don’t have the documentation to support a service, or if the documentation is vague, it might not be worth it to appeal it. Of course, take the dollar amount of the claim into consideration, as well as your relationship with that payer, and also maybe even go back to the payer and let them know that you are working on educating your physician and clinician teams to make sure they are documenting more appropriately and meeting documentation guidelines in the future.

Q – Do you have any final thoughts around claims denial management and prevention?

A – [Lori Brocato] I’ve read that around ninety percent of healthcare denials are preventable. So, if that’s the case, I’d say every organization can make improvements. Here are some additional examples to consider:

  • Are there edits firing on claims that still result in a denial for the same reason?
  • Is it possible that those edits are being bypassed?
  • Is there an opportunity for those to be prevented by a change in process on the front end?

You always want to work smarter, not harder. So, this is something you could address on the front end but not on the back end.

In addition, it’s important to remember that you can’t manage what you aren’t measuring. This is true for KPIs, edits, denials, and rejections. These are key factors in your revenue cycle performance and need to be measured and monitored. Obviously, software tools will help significantly in this area and allow you to dig deeper and deeper until you find those root causes.

And ultimately, there will always be things that will be out of your control, but I encourage organizations to get creative in putting forth the effort to put together process improvement strategies that will have the greatest impact.

Take Steps to Improve Claim Processing in Healthcare & Reduce Healthcare Denials

Huge thanks to Lori for her time and for sharing her insights for this Q & A. These tips are invaluable to those working to reduce healthcare denials quickly and effectively. Now that you have a well-rounded picture of how SSI handles and manages claims reporting and the benefits healthcare providers experience with our support, we’d love to show you how it all works first-hand. Schedule a free demo today to see how SSI can help your organization maximize your revenue cycle management efforts—and returns—at every stage.

Go back to Part 1: Two Critical KPIs Your Organization Needs to Watch

Go back to Part 2: Top 5 Most Common Medical Claim Denials

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