It’s crucial to have a robust program for responding to denied claims. Here’s how to build one.
A median of 8.5 percent of claims from multispecialty practices are denied on first submission, according to the 2019 DataDive Practice Operations Report from MGMA. That number is above the industry benchmark of 6.5 percent for multispecialty practices.
“Not following up on claims denials is like leaving money on the table,” says Elizabeth Woodcock, president of Woodcock and Associates, a physician practice consulting firm. "It's worth a little effort to go after that money."
Denials are decreasing in multispecialty practices. If yours aren’t, or if you want to reduce them further, here are four ways to up your resubmissions game so you don’t lose money to denied claims.
You might not think of denials as routine - and hopefully they’re not - but you should have a routine for dealing with them. If your staff has to stop and think about how to respond to each denial as it comes in, they’re more likely to waste precious time responding. Worse, they may have to spend time deciding which claims to resubmit and which to let go.
“It’s always good to come up with an algorithm for staff to use,” says Karen Lake, healthcare consultant with Pearce, Bevill, Leesburg, Moore. If there’s an set procedure for dealing with denials, not only are you more likely to get them resubmitted on time, you’re less likely to make mistakes in the process.
It’s also a good idea to have an appeals letter template ready to go. You may not have to use it often, but it's good to have it handy when you need it. Being able to pull out the template and simply fill in the blanks can make the difference between filing an appeal and never getting around to it.
Read more: See an example of appeals template here.
Being familiar with your payers and their plans is essential for reducing denials in the first place, but it’s also key to getting it right on resubmission. “Most payers send out regular bulletins with notifications of changes to their plans, such as what they cover and what labs they use,” says Brennan Cantrell, commercial health insurance strategist for the AAFP. “But it can be difficult to find time to keep up with all this.”
In large practices, Cantrell suggests having one employee assigned to each payer. That person can make checking for changes a regular part of his or her workflow. Cantrell acknowledges that smaller practices may not have enough staff for that. But if possible, he recommends to at least designate one person to check for updates from all your payers at least monthly.
Payers have timely filing deadlines for resubmissions as well as initial claims. Make sure you work your denials as soon as they come back. This is especially important when claims are returned from the clearinghouse, Cantrell says. These will usually be easy fixes, such as rejections due to incorrect information or transposed numbers, rather than denials because a procedure or treatment was not covered or a prior authorization was required. The sooner you deal with these, the less time you lose in the filing and appealing process, should that become necessary.
Some issues, such as pre-authorizations or last-minute changes to plans, are perfectly understandable reasons for denied claims. However, with good practices and systems in place, you should be able to avoid denied claims because of timeliness.
Take advantage of your EHR's data analytic capabilities and run regular reports on your claims. If a payer is running late on a payment, get in touch and find out what the problem is. "If you want to stay in business, make sure it is done each and every month," Cantrell says.
He recommends running a report on payers monthly and running a report on clearinghouse rejections daily. "Practices always wish they had longer to work denials, but if you keep up with it - and run those reports regularly - it’s usually long enough," he says.
Resubmitting a claim can often seem like extra work and an interruption to your normal workflow. However, having a plan for resubmitting denials and working that plan consistently will put money in your pocket.