Healthcare practices around the world lose billions annually due to denied claims. In the US alone, medical care providers suffered from an estimated loss of over $120 billion, in just a year. Surprisingly though, around 30% of such denied claims are actually recoverable on appeal. Unfortunately, many claims fall through the cracks and timely turnaround.

Let’s take a look into what denial management is, why it’s necessary and how to set it up.
Understanding Claim Denials: Why It Needs to be Controlled

After conducting complete documentation of patient details, healthcare providers need to file insurance claims for services rendered in order to get reimbursed . But insurance payors can be very specific about time and billing protocols, and failing to meet any of those can result in a claim denial. It can happen due to minor billing errors, missed deadlines, unverified insurance terms, or simply a mistake with the provider’s data. Depending on the insurance requirements, most denials can be appealed if corrected and resubmitted in a timely fashion.

Whatever the reason is, every claim denial could be considered as a significant loss. Some denials are unrecoverable, while some aren’t resubmitted until it’s too late. The time and money spent on corrections also adds up over time leading to major revenue leakage. The only way to control this is figuring out the gaps in the medical billing protocols and bridging them, as well as billing trends and patterns to find out what needs fixing.

Steps of The Denial Management Process
The entire process consists of identification, categorization, tracking, and analysis of the issues raised, along with its resolution and follow-up. Streamlining the process step-by-step is crucial for getting to the root of the problems.

1. Identifying and Categorizing Denials
The initial step is always finding out why a claim got denied in the first place. On the basis of which they are then sorted into ‘hard’ or ‘soft’ denials. Hard-denials are impossible to salvage, often due to reasons like expired insurance terms or late claim submissions. Soft-denials are those that might still be recovered after some correction, like incomplete claim details, etc. Identifying these helps set the priority for the ones that need to be fixed and sent back out as soon as possible.

2. Tracking Claims and Denials
Monitoring the status of claim approvals and denials helps make sure timely action can be taken when needed. Approximately 60% of denied claims never get resubmitted, while 28% of claims are ignored without any checks whatsoever. This is why tracking and alerts are essential for all claim denials. A medical billing software like Easy Billing Pro makes the task much easier and more efficient when there is correct automation.

3. Analyzing Denial Causes and Trends
Understanding cause and frequencies of denials can expose which billing issues may be responsible. For example, more documentation and verification errors indicate the need for better front-end processes. Healthcare practices rely on accurate information for the claims in order to determine what changes are needed in the medical billing office protocol.

4. Resolving and Following Up on Issues
The final step in denial management includes correcting claims, submitting appeals and following-up on them. Whether the appeal is accepted or not depends on this step.
Denial management systems for medical billing should be set up with both efficiency and functionality in mind. Trained billing professionals working with a user friendly medical billing software program to help minimize claim denials effectively. Features like automated filing and verification, medical record integration, tracking, analytics reporting, and should reduce denials of claims and affect the bottom line. See a Demo today of Easy Billing Professional.

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