Denial management means keeping an eye on patient denials. Many hospitals struggle to handle denials well, especially when moving from fee-for-service payment models to clinical payment accounts. This post will discuss the five main denial types healthcare organizations deal with and the reasons for those denials. We’ll also share effective ways to start a proactive denial management strategy in your organization today.
Frequent Denials in the Healthcare Sector
Regarding denials, there are two main types: payment denials and coverage denials. Let’s explore common payment denials in today’s healthcare system.
- Fee-for-Service Payment: This is the most usual way healthcare providers get paid. They submit a bill, and the insurance company pays based on a set fee schedule.
- Alternative Reimbursement Models: These include prospective payment systems (PPS) or fixed daily rate (DRG) systems.
- Capitated Reimbursement Model: In this model, a healthcare organization gets a fixed payment for each patient covered under a contract. Healthcare providers who outsource medical billing services are more likely to get maximum reimbursement on submission of their claims. Medical Billing companies in Alabama, for example, often help healthcare organizations navigate these complex payment structures efficiently.
Why Do Doctors Face So Many Denials for Their Claims?
When an insurance company says ‘no’ to covering a patient, it hurts your financial situation. Sometimes, it’s normal for them to say ‘no,’ but other times, it happens because there’s a problem with how we handle claims. We might not have enough people or tools to deal with many ‘no’s.
The insurance company might say ‘no’ to claims that your billing team didn’t check well. A recent study found that insurers said ‘no’ or didn’t pay enough for over $19 billion in claims in just one year. Like in other parts of healthcare, managing claims is about ensuring everything is working well. This means having the right team, tools, and things to handle the work and fix ‘no’s.
Which Payment Types Are Checked for Denials?
Some insurance companies need providers to watch and handle denials for certain payments. These are often called “managed care” plans and include commercial, government-sponsored, and managed care plans. They have strict rules for how providers should deal with denials. Not following these rules can lead to more denials and delays in payment. If you work with a patient payment account under a managed care plan, you’ll probably need to watch for denials for services given to patients in those plans.
Finding Out Why Claims Are Denied
A denial notice includes a reason for the denial called a “disallowance.” This explains a specific problem with the submitted claim. Understanding these reasons is crucial to fix issues and preventing similar denials. To grasp denials in your organization, track the types you get. This helps create a plan to handle denials and find their root causes. Most healthcare organizations get a mix of payment and coverage denials. Common reasons for payment denials are:
- Missing or wrong information, like claim numbers or dates.
- Applying the wrong fee, using an incorrect fee schedule.
- Incorrect patient eligibility, like the patient being on the wrong plan.
- Billing for services not covered by the plan.
- Billing for services already paid during an inpatient stay.
- Billing for services not provided; the patient didn’t get the billed service.
Better Ways to Handle Denials
To improve how your organization deals with denials, try these strategies. They’ll make your denial management process more effective:
- Team Coordination: Make sure your team works together to catch denial issues early.
- Electronic Medical Records (EMR) System: Use an EMR system to automate denial management tasks and reduce manual work.
- Billing Process Optimization: Keep your billing and claims processes up-to-date and easy for all team members to follow.
- Denial Management Playbook: Create a playbook with tips and best practices for reducing denials. It can be a handy guide for training new team members.
- Robotic Denial Management System: Consider using a robotic denial management system to reduce denials and boost your team’s efficiency.
Get Third-Party Denial Management Services
Outsourcing revenue cycle management to healthcare billing companies offers numerous benefits. It helps cope with challenges by leveraging specialized expertise, reducing errors, and ensuring compliance with evolving regulations. A medical billing company employs advanced technologies and dedicates resources to optimize revenue collection. Outsourcing allows healthcare providers to focus on patient care while efficiently managing billing complexities. Medical Billing companies in Alabama, for example, have a proven track record of helping healthcare providers achieve maximum reimbursement and compliance.
Conclusion
Healthcare groups deal with more claim rejections, around 18% on average. It’s crucial to handle and watch over these rejections actively. Getting input from patients facing denials helps pinpoint issues. Teamwork is key for denial management; include everyone when rolling out new plans. You can efficiently handle denials and boost financial outcomes with a solid strategy and a united team.
FAQs
What is Denial Management in Healthcare?
Denial management is a smart strategy in healthcare. It works to uncover and fix issues causing claim denials. But it’s more than that. The goal is not just to solve current denials but also to prevent future ones. This ensures quick payments and keeps the cash flow strong.
How Many Denial Management Types Are There?
There are five main types of claim denials: Hard denials can’t be changed and lead to lost revenue. They may be appealed for errors. Soft denials are temporary and can be fixed with the right follow-up action.
