November 20, 2024
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Some of the main purposes of health insurance are intended to be a primary mechanism to protect patients as well as ensure hospitals are reimbursed for the services provided to patients. However, one of the frequent issues that hospitals and patients face is claim denial by insurance providers, which unfortunately has become an increasing occurrence post-COVID due to several factors like rapidly changing guidelines and the use of sophisticated tech on the payors side. When claims are denied, healthcare providers face delayed payments and/or potential revenue loss, impacting their financial stability.
This has led to hospitals adopting different denial management workflows in medical billing to improve billing cycles and maximize revenues.By implementing strategic denial management processes, providers can identify common denial reasons, reduce claim rejections, and improve their cash flow. In this article, we explore practical steps to streamline denial management and ensure your medical practice recovers maximum revenue.
The term Denial Management refers to investigating why medical insurance claims are denied. This process helps hospitals predict, identify, analyze, and manage insurance claim denials, thus ensuring maximum reimbursements. Medical insurance providers have several terms and conditions and when the treatment process does not resonate with their policies, they reject insurance claims for medical procedures. Let’s learn about what leads these companies to deny a medical claim.
A claim denial is when medical insurance providers refuse to pay the hospital for medical services. Claim denials cause a six to eight percent revenue loss for hospitals, which is huge. About 85% of denials are preventable. Denial management is the unsung superhero of hospital billing systems. With an efficient denial management system, hospitals ensure that their patients are treated effectively without compromising the quality of care while having a fuss-free billing process.
Claim denials are classified as hard or soft, depending on their nature. A hard claim denial involves issues in clinical procedures and is often difficult to appeal while a soft denial is related to technical errors or administrative errors and can be corrected easily. In many cases, medical insurance claims denials happen in the first stage of inquiry or registration. However, depending on the nature of the insurance policy, these claim denials can be distinguished as follows:
1. Errors in coding: Incorrect CPT codes are a common reason for claims denial. However, this issue is temporary and can be corrected by the hospital administration team.
2. Duplication of claims: Submitting a medical claim for the same procedure immediately after purchasing the medical insurance can lead to claim denial. Such claims are automatically flagged and rejected by insurance companies. An efficient pre-billing system can help identify and correct such errors in the beginning, thus ensuring a satisfactory experience for patients and hospitals alike.
3. Missing patient information: Thoroughly examine for any missing medical documents before billing.
4. Unapproved medical procedures: Insurance companies have caps on what procedures are covered under a particular medical insurance scheme. Any procedure not covered by medical insurance will raise a red flag and lead to claim denials.
5. Late/early submission of claim: Upon enrolment in an insurance scheme, beneficiaries have to wait for some time (typically a few months) before they can claim insurance payments. They are also required to submit their claims within a certain time frame after availing medical care services. Failure to do both can lead to claim denial.
6. Medical conditions not covered by the insurance policy
7. Non-compliance with insurance policies.
A foolproof denial management system ensures a hassle-free billing process and a smooth revenue cycle. Employing the following measures in your denial management system will help in maximising reimbursements and limiting the number of claim denials.
Prioritise- High-value cases that involve significantly large amounts of reimbursements. It is important to meticulously comb through the insurance information and documentation of patients who come for high-cost procedures as soon as they arrive in hospitals.
Prevent - Employ tight pre-billing procedures to prevent claim denials. That means implementing automation systems to check CPT codes, patient information, insurance documentation, and missing documents. With CombineHealth’s AI medical coding system, avoid the hassle of manually verifying codes. Amy, CombineHealth’s medical AI system can process 1000+ charts in an hour. This contributes to an efficient denial management system.
Identify - Identify high-value claim denials to ensure reimbursements of high amounts.
This ensures that hospitals are paid fairly for their services.
Categorizing claim denials - Once it is identified, the next step is to differentiate the denial claim depending on its nature.
Appeal/resubmit claims - Thoroughly investigate why the company denied the claim. If it is a soft denial, craft a strong appeal and resubmit the claim.
Track & Analyze - Set up an efficient tracking system to check on the claim status. Keep sending follow-up emails to expedite the process.
The above steps form the core of a robust denial management system, ensuring that hospitals get timely reimbursements. Now that we have established the ground rules, here is how hospitals and other medical institutions can ensure their consistency.
Denial management may seem like a vast ocean of procedures. The right billing technology and CombineHealth’s AI coding system will ensure a streamlined denial management process. It is essential to embrace the latest technology while implementing denial management across medical institutions.
The COVID-19 pandemic took the world by storm. The virus, in its wake, gave birth to several health complications and comorbidities. This led to the development of new codes to define illnesses that were unheard of. This led to revolutionary changes in denial management. Here are a few ways in which the pandemic affected the way denial management works.
Additionally, a focus on continuous process improvement has emerged, encouraging healthcare providers to regularly evaluate their denial management practices and adapt to changing payer requirements. These adaptations aim not only to minimize denials but also to optimize revenue cycles in a post-pandemic landscape.
With its advanced AI workforce, CombineHealth is transforming medical coding. AI-powered medical coders like Amy help analyze medical records, including doctor notes, test descriptions, medical history, etc., and automatically assign the appropriate ICD-10 and CPT codes based on the documented diagnoses and procedures. This reduces human error and increases coding accuracy. Like human coders, Amy also recognises gaps in medical documentation, promptly querying the providers to give additional context required to determine the most appropriate ICD or CPT code.
Finally, Amy clearly highlights the reasoning and the thought process behind determining the medical codes.This significantly eases the process of auditing Amy’s outputs, helping with a reliable and trustworthy adoption of medical coding AI.
If you are interested in learning more and partnering with us, please get in touch with us
Denial management processes help in identifying, categorizing, analyzing and tracking possible insurance claim denials. This ensures that hospitals get paid on time and patients receive excellent care.
CombineHealth’s efficient AI system processes high volumes of CPT codes, thus facilitating a robust pre-billing system that can limit possible claim denials.
The best way to ensure an efficient denial management system is to identify, classify, analyze, re-appeal, and track possible cases.
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