While commercial insurers have made some progress towards reducing incorrect payments and denials, the dollars associated with these inaccuracies are staggering, and the healthcare industry seems to not only recognize but accept this fact. Can you imagine having the same standard in other areas?
From your mortgage company: “Oh, we don’t mind if you only send the correct payment nine or 10 months a year.” To your son: “As long as you only fail one of your 10 classes, your dad and I are perfectly happy with you!”
Maybe our home ownership or son’s college acceptance isn’t at stake, but inaccurate or denied payments has more than its share of negative consequences. Besides lost revenue, it can lead to staff inefficiencies, a more convoluted workflow and an increase in A/R days by as much as 50 percent.
Regional Urology, LLC, CEO Joel Young and I recently presented “Three Steps to Denial Management” at the MGMA 2014 Annual Conference. We discussed how practices’ typical focus on quick claims payment without front-end rejections is great, but shouldn’t be at the detriment of denial management – a practice that can be optimized via a three-pronged initiative:
- Avoid having denied claims
- Ensure payments and non-payment reasons are correctly posted and categorized in a timely manner
- Monitor, analyze, report and take action on denied claims
Sure, you’re thinking, but that’s easier said than done. Going back to our initial analogy, you can tell your fifteen-year-old son, “Hey, I need you to avoid failing geometry,” but merely saying it won’t make it happen.
Fortunately, technology and process improvements exist to help you launch an action plan. (We’re talking about denial management here, not geometry grades.) Electronic eligibility can help you understand patient demographics, insurance coverage and patient financial responsibility. You can leverage revenue cycle tools with sophisticated claims editing to ensure proper diagnosis usage such as gender, age, specificity and manifestation. And by actively watching for denied or incorrectly paid claims, you can take steps to appeal them – and even install process changes to prevent future denials.
Just because a standard exists doesn’t mean we should accept it. By raising the denial management bar, you’ll reap a host of financial and operational benefits that can help your practice thrive!
To watch the entire presentation from MGMA14, click here.