Take Control of your Medical Billing Denials
It has been accurately stated that you cannot manage what you do not measure. This is particularly true in the arena of medical billing denials. Without a strong Revenue Cycle Denial Management system in place you cannot properly manage this critical element of medical billing. If you are not managing your denials then you are most likely leaving more than 20% of your revenues uncollected.
There is a lot of confusion about the definition of denial management. If you ask five medical billing experts what this means you will probably receive six answers.
A good start to finding out if your practice is suffering from improper denial management is to find out from your medical billing service (or in-house medical billing manager) how they manage denials and how they measure success in this area.
A good denial management system is not simply about working denials, it is about systematically gathering the data required to eliminate denials. Working denials is like pumping water from your basement when a pipe bursts. Denial management is about fixing the pipe so you no longer need to pump water from the basement.
The system accomplishes this needed service by tracking, quantifying, and reporting on every claim billed for which any payer denied the service. The reporting should be comprehensive, tracking all denials (not just selected denials). If used properly, the system can reduce first-time claim denials by over 50 percent. Many practices have no way of monitoring if payers are denying their claims at excessive or unwarranted rates, or even for what reason. These practices are probably losing 10 to 20 percent of their total revenue.
What is typically missing from troubled billing operations is the lack of the management-reporting expertise needed to extract the data in a concise and meaningful way coupled with a lack of methodical, measured billing process needed to correct mistakes. A comprehensive Revenue Cycle Denial Management system has two main purposes. The first purpose is to provide feedback on why claims are denying and how many claims are not being paid on the first submission to the respective payers. The second is to fix these issues. Effective Revenue Cycle Denial Management software databases must be designed to track, quantify, and report on all denials for all payers.
The standard denial management output should track by payer, the number of claims denied and the reason for the denials. This must be coupled with a dashboard reporting tool for quick visual management. With these reports the billing team can easily identify which payers are inappropriately denying claims; they can also compare these payers to their peers for proper trending and follow-up. This output allows the medical billing team to develop and refine payer specific rules to prevent future payer denials by insuring all claims are clean when they are submitted.
With the analytical capabilities available, the medical billing department or medical billing company can identify systemic medical billing problems, create and test solutions to the problems and implement process changes that will increase collections AND drive down medical billing costs. One example of this is pursuit of Clean Claim Law violators with the denial data produced from the denial management system.
As previously mentioned, an effective denial management system is critical for your practice if you want to improve your medical billing and hasten your collections. Implementation of the proper system can easily increase collections by more than 10% and could even exceed a 20% increase in collections.
Copyright 2008 by Carl Mays II
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