Denials make up an important part of the cost of running a practice as services provided but not paid can significantly affect the profitability of a practice. But the increasing complexity of insurance contracts, falling reimbursements and claims denials are a harsh reality for most practices today.

In the current demanding healthcare environment a good billing system which can accurately recognize denials, denial trends and their causes is a requisite to high productivity and reduced costs.

Industry Averages

Preventable Denials = 90% Denials that are Recoverable = 67%

This is manageable but with an efficient billing system, and also essential considering-

  • Claims Rejected on 1st Submission = 30 %
  • Underpaid Claims = 20%
  • Gross Collection Rate < 60%
  • Cost per claim = $5-$7

  • Cost to practice of managing the average denial is anywhere between $25 to $30, hence denial rate over 10% should be evaluated closely
  • High performing practices denial rates are below 5%; while other practices denial rates are between 10% - 20% or in the extreme even at 30%!

How can preventing denials affect the Bottom Line?

Claims rejected on the 1st Submission are 30% and only 50% of these claims get resubmitted on an average, which is a substantial amount of claims unpaid due to lack of control over the billing process. Moreover the cost of working the average denial being high, the practice incurs various staff and office expenses even equaling to 10-15% of the earnings. This spare income otherwise could have been reinvested into staff, equipment, or for future use, hence preventing denials can drastically help cut costs, improve efficiency and also increase profitability.

As too many denials can create a cash flow problem industry experts’ state- depending on the size of the practice, claims written off as denied, should not amount to more than 4%!

Preventing denials requires a comprehensive billing system including-

Proper insurance verification process, complete documentation, regular reports, tracking of underpayments and denied claims, on par industry training, efficient collection tools and updated software.
Tracing denials to different functions within the practice, monitoring denial rates, constant payer and industry research to identify upcoming opportunities and changes to prevent billing errors and denials.
Clear policies and processes for handling claims denials and regular updating of processes and policies to eliminate recurring errors along with periodic audits in areas which require improvements.

Take control of your denial management with MBC’s billing solutions…..

  • Analysis of Charge Entry to verify accuracy of diagnosis and procedure codes to ensure compliance
  • Identify new rules and track payer denial activity including proper documentation for complete claims qualifications
  • Regular reports to help identify claim resubmissions and claim status to enhance payment transparency and ensure better control over payments
  • In-depth process study to find practice areas where improvements can be made to increase claim reimbursements and help during policy and processes formulation
  • An Expert team monitoring the entire denial management process providing easy accessibility to help track your claims throughout the claim’s pay cycle and providing regular audits

MBC providing billing services across all 50 US States and varied specialties expert provides denial management services meet national and local requirements for medical necessity and complies with commercial claims stipulations. MBC’s combined resources of expertise, knowledge and technology helps get-

  • Reduced bad debts and write-offs, lost transactions, duplicate batches and unnecessary redundancies in your claims management
  • Cleaner and comprehensive claims and significantly eliminates the need for claims resubmission
  • Increased cash predictability, reduced corrections, faster payment of claims, lesser AR days and reduced operating costs

MBC billing services help reduce denials by more than 70%
overall increasing collections by 15-20%!

Published By - Medical Billers and Coders
Published Date - Apr-22-2013 Back

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