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Stop living in denials – The impact of inefficient billing processes


Inefficient billing processes can result in frequent delays in claim submission, issue resolution and revenue capture.

claim denied | © Inna - stock.adobe.com

© Inna - stock.adobe.com

For the vast majority of practices, inefficient billing processes can result in frequent delays in claim submission, issue resolution and revenue capture. In today’s competitive market, it is vital that medical practices and physicians are prepared to increase their net collections and capture every dollar they can out of insurance claim submissions.

To achieve maximum financial performance, practices need to immediately focus attention on reducing the administrative burden and substantial revenue impact of claim denials.

Claim denials occur when an insurer refuses to pay for a provided healthcare insurance, after a claim has been submitted. Unfortunately, the industry is experiencing a rise in claim denials across the board.

Claim denials directly impact practice performance

High claim denial rates have a documented and direct financial impact on physicians and healthcare providers. According to the Council for Affordable Quality Healthcare (CAQH), administrative expenditures associated with claim denials amount to more than $31 billion per year.

This expense includes the time and resources required to managed denied claims, the appeals process and submitting additional documentation.

A recent KFF study of ACA health plans found that even when patients received care from in-network physicians, insurance companies initially deny 17% of the claims on average. ProPublica research has found that overall insurers typically deny between 10-20% of the claims they receive.

Frequently, the reasons for claim denials widely vary and are often complex.

Coding errors, missing information, and lack of insurance eligibility are some common reasons for denials. Additionally, constantly changing payer policies and guidelines add to the challenge. As a result, medical practices are challenged to keep current with requirements and appropriately submitted claims.

Claim denials can be avoided

A Change Healthcare study found that approximately 86% of denials are potentially avoidable. The study also found that in 65% of cases, providers do not resubmit denied claims.

Given this information, if most claims are potentially avoidable why aren’t more practices addressing this challenge? Many believe it is a perfect storm of a shortage of staff, changing documentation requirements and a never-ending backlog of claim denials.

To address these challenges, practices must begin working smarter and not harder. Technology can help prevent, manage and predict future denials. It can also improve operational efficiency and increase optimization of current resources and workflows.

Improving claim submissions through technological capabilities

When it comes to claim rejections and denials specifically, missing information, coding errors and a lack of pre-authorizations often lead to time consuming resolutions to manage rejections.

To avoid the likelihood of denials, practices need to focus on improving their front-end processes, ensure claims are correct before submission, streamline denials rework and take a new approach for denied claims.

Fortunately for healthcare organizations and medical practices, tech-enabled revenue cycle management (RCM) solutions are now utilizing sophisticated claim scrubbing and claim routing logic that allows practices to eliminate the pain and complexities involved with medical billing and help to ensure that insurance reimbursement is maximized.

For example, by incorporating RCM tech solutions, analytics, and logic, practices are now able to quickly identify trends in denials and proactively address any concerns.

Among other key benefits of tech-enabled RCM platforms:

  • Improved claim scrubbing and submission
  • Automated claim rejection and denial follow-up
  • Shorter payment cycles
  • Higher collection rates
  • Less days in A/R
  • Reduced operating and administrative expenses

While the causes of denials will vary, there is no question that inefficiencies in the revenue capture play a crucial role. With the industry experiencing decreased reimbursements and rising costs, practices need to do all they can to avoid further downward pressure on revenue. Reducing the percentage of denials is an obvious place to begin.

By properly leveraging RCM technology to reduce denied claims, improve cash flow and get paid faster, medical practices can be well on their way to better financial health with improved efficiencies and revenue capture.

Lisa Taylor is the CEO for Encoda, a leader in healthcare reimbursement automation and technology-enabled revenue cycle management (RCM) services that empower medical business offices to cost-effectively collect the most revenue in the shortest time possible

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