How To Reduce Claims Denial Rates In Your Medical Practice

How To Reduce Claims Denial Rates In Your Medical Practice
Dr Josh December 31, 2021 medical billing

In a Medical Group Management Association survey, 69% of healthcare leaders believed that denials saw an elevation in 2021. Approximately half of these leaders considered this increase to be 10%, whereas 12% of them indicated it to be as high as 30%. Almost all medical practices face the ugly reality of denials in medical billing, and approximately 10% of all claims submitted by a standard medical practice are rejected. The transition to ICD-10 in medical practices has prompted more health insurance claim denials. However, this does not mean that you need to settle for a 10% or higher denial rate. Almost 90% of all denials are preventable, and thus you can bring your denial rate down to the industry standard of 3-5% by implementing certain healthcare denial management techniques.

Denied Claims and Healthcare Denial Management

Denied claims are the ones that are adjudicated and denied payment by a payer. Both rejected and denied claims are a big headache for healthcare organizations as they translate to delayed or lost revenue and a long chain of appeals. Some healthcare organizations have denial management teams, which investigate the causes behind denied claims, resolve the complications, resubmit requests to insurance companies, and file all required appeals. However, many medical practices do not have this facility, and that is where healthcare denial management tactics come in handy.

How can you reduce Medical Billing Denial Rates?

The health insurance claim denial statistics of even the most meticulous and widely popular medical practices are not zero. Although billing, documentation, and coding are not child’s play, it is possible to reduce your denial rate. Let us look at three ways you can do it.

Identifying the major causes behind high denial rates

The foremost and most sensible approach to reducing high denial rates is delving into the possible reasons that may be causing the increase. The reasoning behind high denial rates varies by practice and specialty. Thus, it is essential to start off this process by compiling the claim adjustment reason codes upon which a denial management strategy can be built. These codes may be inconsistent and cryptic, but mapping them to actionable descriptors can provide you with a thorough and profound look into the root problem-causing circumstances. Some common reasons behind the increase in denial rates may include:

  • Expired eligibility
  • Lack of medical authorization or referral
  • The invalidity of a procedure, diagnosis code, or both
  • Duplicity of claim
  • Claim not submitted at par with the timely filing guidelines
  • Inaccurate insurer address
  • Wrong modifier
  • Demographic errors such as misspelled patient name, incorrect date of birth, or insurance number
  • Lack of supporting documentation
  • Invalid diagnosis codes or procedures
  • Billing of global charges instead of billing professional or technical components
  • Billing of unwanted medical processes
  • Plan restricting provider to see the patient
  • Need of additional information from the patient by the payer

Verifying patient information aptly

Health insurance claim denial statistics put forward by MGMA show that 42% of healthcare professionals consider prior authorization to be the primary reason behind medical billing denials. Many medical organizations fail to monitor the crucial and minute details about the patients undergoing diagnosis or treatment at their facility, which may be due to understaffed personnel, hectic schedules, or simply carelessness.

Failure to collect complete demographic information on the front end can lead to an explosive situation and prompt plenty of denial claims. If your medical practice is understaffed, you can use software tools to better manage vital patient information such as appointment regulation, patient check-in and check-out timing, a list of medical procedures undertaken, and financial matters by automating them. These tools also manage critical information about deductibles, coverage, contractual fees for specific services, and copayments. This reduces the risk of manual filing and billing and clears up the administrative staff’s schedule of a practice.

Regular and updated staff training

Insufficient or antiquated staff training practices make up a suitable recipe for disaster. Although a seemingly minute endeavor, regular and up-to-date staff training strengthens the administration of a practice and thus builds a holistic and robust foundation for an organization to thrive. Blunders made by the staff are a significant reason behind health insurance claim denials and can be rectified by prioritizing medical coding staff training, executive seminars, and other related areas. A well-trained staff minimizes data entry errors, is aware of insurance coverage and eligibility policies, and can skillfully cover all documentation requirements, thus reducing medical billing denial rates.
Regular staff training may require a specific amount of money, but it is pivotal to realize the investment nature of this payment. Trained staff can conveniently reduce the vast sums spent on managing denied claims and thus balance the initial amount spent on them. On the other hand, you can quickly lead your practice to ruin by refusing to devote time, effort, and money to an ill-trained administrative staff.

Dr Josh

Dr. Josh is a physician who's helping spread the knowledge about Telehealth and its advantages. At SmartClinix, he's providing his expertise and knowledge in the form of engaging articles on various health & tech related topics.

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