Tips to Manage (and Minimize) Claims Denials in the Healthcare Industry
Effective solutions to ease the pain of managing healthcare claims and invoices.
The management of medical claims can be a complicated and time-consuming process. Fortunately, there are effective solutions to ease the pain of managing healthcare claims and invoices.
The cure for preventing medical claim denials is to set up efficient processes to identify incomplete or incorrect claims before they are submitted for payment.
Morgan Haines of The Advisory Board Company is quoted as saying that, ‘90% of healthcare denials are preventable.’
What is a Medical Claim Denial?
A claim denial happens when a claim is submitted for payment but is rejected by the third-party payer. This can happen for a variety of reasons.
Understanding the most common medical billing reasons for claim denial will help to resolve billing issues, straighten out unfair denials, and ensure that you get paid for a greater number of services provided by your healthcare practice.
How to Prevent Medical Claim Denials
Let’s examine some of the main causes of medical claim headaches and explore how to prevent them.
Verify Insurance and Authorizations before Service
It’s reported that ineligibility accounts for 24% of all payment denials. Therefore, upfront verification of eligibility is of the utmost importance for preventing payment denials or write-offs. Moreover, a patient’s insurance should be checked before every healthcare visit. It should also be noted that certain authorizations are valid for a specific period.
Correct Incorrect or Incomplete Patient Information
Incorrect or incomplete patient details such as incorrect plan codes or a missing social security number make up approximately 61% of initial medical billing denials. Attention to detail is key.
Keep your Diagnostic Codes Healthy
ICD-9-CM diagnosis codes must be as accurate as possible. As a rule, a 4-digit code should be assigned for each procedure if there is no fifth-digit subclassification for a particular category.
The Council for Medical Schemes (CMS) for Medicare and Medicaid services also requires all Medicare providers to use diagnosis codes with the highest level of specificity as per the HIPAA, as do most private payers.
It’s important to note that several codes are discontinued or replaced by others annually.
Know the Rules and Requirements of Third-Party Payers
Understanding the payment requirements of the various healthcare insurance payers will expedite payment and reduce the number of payment denials. So, it’s vital to stay up to date with the latest healthcare changes.
Ensure the Claim is Submitted on Time
Different healthcare payers have different rules regarding the filing of healthcare claims. Missing a submission deadline will usually result in a claim being denied. Furthermore, it should be noted that commercial payers and Medicare have different payment guidelines.
Leverage Technology to Expedite Claims
Many of these solutions can be automated for ease of implementation. Most healthcare software systems will flag incomplete claims before submission to the healthcare payer for processing.
Keep Your Finger on the Pulse
If your medical practice has a payment denial rate of 5% or less, you’re within a satisfactory margin. But, if you’re experiencing an above 5% payment denial rate, a review of your processes can have a beneficial impact on your bottom line.
Conclusion
A few operational changes can be highly beneficial and ultimately save you time and money. Accuracy is the ultimate painkiller when it comes to managing claims and invoices in the healthcare industry.
To chat more about managing your healthcare claims and invoices, connect with our team here.