A recent study by the American Medical Association (AMA) found that on average of almost $15,000 per year is spent on investigating, appealing and reworking denied claims. Having a high denial rate means more time and money spent on reworking and resubmitting claims to payers. The good news is that there are actions you can take to help your practice reduce denials. The tips below will help you understand how your practice is performing and help to monitor denials so that you can at a minimum maintain the industry standard denial rate of 3% to 5%.
The first step to getting a handle on your denials is compiling your claim adjustment reason codes and making them easier to identify. This will help provide a foundation on how you can build a denial management strategy. For example, you can categorize denials by common reasons such as:
Your staff should be familiar with all Centers for Medicare & Medicaid Services (CMS) and private payer coding standards. Encourage your team to share important updates with the entire practice as information becomes available. This will help everyone within your practice to be on the same page. This can also reduce any surprises when it comes to the constantly changing medical coding environment.
An effective method to minimizing denials is to have your front office staff receive prior authorization for every service that is required. In this manner, your staff can work ahead of time to ensure that each patient has the insurance available so that the service can be delivered with confidence of being covered. This becomes especially important as patients tend to change insurance providers.
Don’t let a small mistake cost your practice time and money. Checking each claim for accuracy can seem like a lot of work, but avoiding the need to rework claims due to errors will pay off in the long term. With that being said, errors may happen, but missing a deadline however, should not. Your denial rate from untimely filing should be 0%.
Part of the concern when submitting claims is the risk of human error as mentioned above. The chance of this occurring can easily increase if your practice staff is trying to handle too many operations at once. We mentioned the constant need to recheck, but what if there isn’t enough time? Bringing on a medical billing company can take some of this burden off of your staff. These companies have coders in place along with the necessary software that is built to routinely check for errors that can lead to denials.
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