The numbers are staggering. Industry averages report that nearly 20 percent of all claims are denied, rejected or underpaid. And considering the cost to rework claims — not to mention even higher appeal costs — as many as 60 percent of returned claims are never resubmitted.
With figures like these, it’s no wonder medical practices continue to face intense financial pressure. As negotiated reimbursements stagnate and operating expenses like rent and salaries continue to increase, the struggle to maintain steady revenue becomes even more crucial. For many practices, conducting reviews of their revenue cycle workflow would show gaps in their claims process. The good news is, these gaps can be bridged with the help of emerging technology.
With a saturated market of coding, billing and compliance solutions, how do you begin to find the right technology for your practice? When trying to improve revenue integrity, it is important to understand exactly what vendors offer. For example, consider the term first-pass claims rate, which is still used by some healthcare IT vendors to represent the number of claims initially accepted by payers.
But what is not always calculated is how many of those initially accepted claims will eventually be denied or underpaid. A better question to ask is: What percentage of claims are getting paid the first time they are submitted?
The fact is, practices that do not employ the latest clinical coding and editing tools within their revenue cycle are leaving money on the table. This is revenue that is rightfully theirs but is being pursued at high, incremental costs. It’s time to rethink traditional denials management practices, move beyond first pass claims rate and embrace the future of denial prevention.
Why clinical editing software is necessary
Busy medical practices are often understaffed, and chasing claims revenue is time-consuming, tedious and costly. Each payer has its own rules, and those rules can vary based on the date of service for the claim. Finding a solution that maintains payer rules and allows for custom rule creation is a necessity when evaluating clinical coding and editing software.
Many practice management systems, EHRs and clearinghouses offer some level of claim editing. But practices can no longer rely on simple front-end editing that only checks for issues such as missing or incorrectly formatted fields. Even systems that check Medicare local/national coverage determinations or national correct coding initiative (NCCI) edits may be lacking in true clinical coding edits. Consider finding a solution that can edit for these top denial categories:
- Mismatched CPT or ICD codes
- Incorrect coding
- Lack of medical necessity
- Upcoding and unbundling
- Missing or wrong modifiers
As you research clinical coding and editing solutions, consider how often the content is updated. In the past, many traditional claim scrubbers were updated quarterly, but that no longer reflects the speed at which coding and billing rules change. Many of these revenue-impacting policy updates occur weekly across different payers. Remember, a quality clinical coding and editing solution should be sophisticated enough to return edits that require attention without overwhelming billers and coders with unnecessary information.
Improving revenue cycle integrity
Like most healthcare technology, finding the right clinical coding and editing software requires an understanding of the full revenue cycle. Start by reviewing your current processes and technologies from the front end (office and intake staff) through the back end (denials management). Improving revenue cycle integrity requires comprehensive tools used consistently throughout the revenue workflow.
The first opportunity for clinical editing occurs at charge entry. In many cases, clinical coding and editing solutions can be integrated directly into an EHR’s workflow to verify information at the encounter level. As the charges are entered, solutions can verify medical necessity requirements, modifier usage, CPT/ICD validity and many more potential issues.