The ever-changing healthcare scenario is making it difficult for clinicians to manage their finances. On one hand, the number of patients are increasing every day, while on the other, reimbursement by insurance companies for medical care provided is being reduced. Rising expenses and tons of paperwork; compliance issues and fears of a malpractice suit – all these are creating pressures on healthcare providers to maintain their standards of care and service.
According to “Overhauling the US Health Care Payment System”, a report by McKinsey & Co, up to 35% of the average medical practice’s total revenue comes from patient payments. This amounts to thousands of dollars lost every year if the medical practice does not collect outstanding balances in time. There is an old saying, ‘You need to spend money to earn money.’ In order to ensure that their financial health is in good shape, the healthcare industry spends $315 billion annually on claims processing, payments, billing, bad debts and other RCM aspects. New Revenue Cycle Management processes are helping healthcare providers in reducing claim underpayments and denials.
According to statistics, 30% of medical claims are denied or ignored on their first submission. Added to this, are the dismal figures for claims underpayments which is estimated to average between 7 to 11%. Denied claims can cost a healthcare facility thousands of dollars every year. Reducing claim denials streamlines the revenue cycle of the healthcare facility and gives physicians more time to focus on patient care and services. Here are some tips that help in reducing medical claim denials.
The three most common reasons for denied claims are medical coding errors, medical necessity and patient ineligibility. Proper checks at the time of registration will ensure that both the practice and the patient are aware of the insurance validity. Creating a check list for the staff is a good way to make sure that there are no insurance validity surprises later on. Medical coding errors can be reduced by proper and regular training for the staff responsible. With the advent of ICD-10, it has become even more critical that the staff is thoroughly trained to handle the coding process.
There should be regular analysis of all claim denials to detect patterns and understand where the error takes place. An analysis undertaken every quarter will help in adjusting the procedures to ensure that claims are not denied for the same errors as before. An analysis is also important to know who is responsible for the errors – the staff or the insurance company. Using the analysis to reduce errors will result in cutting down on denials and subsequent appeals, saving time and money for the practice.
Are the denials worth the money spent on appealing them? It helps to know this if the denials are categorized according to cause. Identify commonalities within the denials and further categorize them based on who they are attributed to – the insurer, the physician or the coding specialist. Knowing these can help in concentrating the maximum efforts on that category. Categorizing denials will also help in prioritizing them based on monetary value and realizing if it is worth appealing.
Different insures have different sets of rules with regards to claims submission, which they change from time to time. It is important to regularly review these rules to ensure that there is no error in submitting the claims. Creating a checklist for each insurance company and making sure that the staff checks all claims documents and forms against it is a good way to ensure an error free claim submission.
Technological advances in the medical billing world are making it easier to control errors. In order to enjoy the benefits of this technology, it is important that the staff is trained on the latest hardware and software available. Ensure that advantage is taken of the claims scrubbing system to help catch errors before a claim is submitted. There are many tools that are available to help with claims management – ensure that the staff is aware of the latest tools that can help the practice in managing their claims better.
It is important for all healthcare providers to remember that patient receivables can be the difference between a profitable and an unprofitable business.