Medical claims are a major part of the profitability of your practice. It can also be a major source of revenue loss when claims are denied.
Denials negatively impact operational cash flow, revenue, and efficiency. According to the American Academy of Family Physicians (AAFP), denials for physician practices are between 5 and 10 percent.
To ensure consistent revenue flow and reduce the number of denials, you need the right denial management strategy. While getting to ZERO denials is virtually impossible, it’s not impossible to get to under a rate of 1% if you have a good strategy in place.
At ML Medical Billing professional medical billing and coding, one aspect that we know well is managing denials. Before we discuss strategies to help your practice handle denials better, let’s review the two types of denials and the top 5 common reasons for denials.
Two Types of Denials
A hard denial is permanent. It cannot be reversed or corrected, so it is lost revenue.
A soft denial is temporary. It can be paid if the claim is corrected and/or has additional information added.
Top 5 Reasons for Denials
According to the American Medical Association National Health Insurer Report Card, these are the top 5 reasons for claims denial:
- Missing information
- Duplicate claims
- Service already settled
- Service ineligible according to a healthcare plan
- Missed deadline
7 Strategies for Effective Claim Denial ManagementML Medical Billing offers the following 7 strategies that your practice can follow to improve denial management:
1. Patient Data Quality
Get it right at registration and many headaches can be solved before they even start.
2. Meet Deadlines
One of the most common reasons for a denial is a missed deadline. A system that maximizes efficient workflow ensures that claims and all required paperwork are submitted on time.
3. Why Was a Claim Denied?
What was the underlying reason for denial? Did the patient know the process and did he/she follow it? Did you or your staff overlook a regulation or not take into account a recent or sudden change?
It’s easy to assume why a claim was denied, but it can be a fatal mistake to do so. If you find the root of the cause, you can be prepared and able to predict future potential denials.
4. Quantify Denials with Automated Claims Management System Software
It’s easy to lose track of denial claims and allow them to pile up. This makes tracking even more difficult and results in lost revenue and profitability. By investing in software that automates this process, you’re able to streamline. This simplifies tracking claims, including resubmitted requests, and helps stop revenue loss.
5. Regular Analysis
With streamlined automation, the workflow is efficient. Thus, denied claims can be analyzed, corrected, and resubmitted promptly. This reduces the chances of falling behind and increases more regular collections, helping maintain profitability.
6. Follow the Progress
From start to finish, your practice should be on top of the process at all times. With automation and regular analysis, you can pinpoint problems quickly by tracking where each claim is in the process. It also helps you understand where regular issues crop up.
7. Notice Trends
There is often at least one or two commonalities inherent to denials. Regular analysis helps you determine these trends and identify causes, which prepares you to stave off revenue threats better.
Outsourcing Your Physician Practice Management Could Be the Ideal Solution
Sometimes, an in-house staff is simply too busy, which is when denial claims can pile up. By outsourcing your medical billing to a professional medical billing company, like ML Medical Billing, is an ideal solution. They are part of your team, solely dedicated to your physician practice management and trained to optimize workflow, including managing the denial process. To find out more, contact our team of specialists today.