The relationship between healthcare providers and insurance companies is fundamentally contentious. Healthcare providers expect to be paid generously for their services, while health insurers prefer to be stingy in terms of payment unless they absolutely have to. To save money, healthcare insurers bring on a set of complicated rules and edits under which they can openly deny or reject claims for the slightest pretence.
Industry Facts State:
|Denied, rejected, resubmitted and underpaid claims can cost your practice as much as $100,000 per month according to the AMA|
|Your practice can lose more than $75,000 per year in denied claims that are never resubmitted, based on multiple studies confirming that many practices do not resubmit up to 50% of their denied claims|
|Underpayment of approved claims has historically been as much as 35% lower than the contract amount|
Considering the current healthcare scenario, getting paid for your medical services may often seem like a constant battle. The health insurer inspects every claim carefully for some justification to decrease the amount they owe you, slow the payment, or to just deny the claim. Even though it may cost your practice for re-appealing denied claims, you need to consider appealing denials or else you end up losing thousands of dollars of revenue every year.
Denial management is the crucial part of revenue collection system and industry experts state that most successful practices display denial rates below 5%!
Steps to Reduce Denied, Rejected, or Underpaid Claims
Use Electronic Claims:
By utilizing electronic claims, you can ensure that all the claims you submit to your payers are in the correct format and accurately coded. Using electronic claims will not necessarily fix the claims’ coding errors, but will show the errors so you can alert your billing staff and get it corrected. The better alternative is to submit clean and accurate claims on the first submission so you don't have to drive up costs by re-working the claim. Analyzing your current revenue cycle process and updating your practice management and billing software systems with accurate data will help get claims paid faster and to the highest allowable amount in your contract.
Analyze Your Cashflow:
As a physician, you need to carefully analyze your current cash flow, accounts receivable, and claims denials before implementing any revenue cycle process change. As you’re performing this assessment, you need to scrutinize every claim denial to determine why it was rejected. You may also need to assess every denial and observe denial pattern. In this way, you will be able to understand if this issue is only occurring with a certain provider or biller or this phenomenon is widespread across your practice.
Appeal Old Denials and Underpayments
After performing your cash flow analysis, you’ll likely spot several health plans that are either slow to pay or frequently pay less than the contracted amount for certain codes. Most practices have 30 or more health plan contracts, so it is important that they concentrate first on their highest-revenue grossing health insurers. Also, you should confirm that the amounts in the fee schedule match with what the insurance companies are paying you. If not, you should appeal the underpayments with those payers with supporting documentation, and maintain a follow-up log tracking the health insurer’s response.
Update Billing Systems
After performing the initial analysis, your practice must continue to create monthly collection reports, listing each underpaid claim, including those unpaid after 30 days. As a practicing physician, it is also important to make sure that the health plan contract and payment data are updated regularly in your billing and patient registration systems. Also, you should make sure that your billing systems are using the most current coding versions of the CPT and ICD-9-CM for diagnoses to prevent denials. Keep in mind that you will have to update your systems to ICD-10-CM by October 2014.
With a little due diligence and persistence, you will begin to capture revenue that you may have thought was uncollectable. Don’t be afraid to ask for help from a billing company if you don’t have the time. It is important that you concentrate on your practice rather than worrying about denied, rejected, or underpaid claims.
Increase your overall revenue with MBC's complete billing solution!
|Track and report your claim denials that requires adequate knowledge of billing experts|
|Identify the root cause of most frequent denial reasons like registration, charge entry, referrals & pre-authorizations, patient information, duplicates, ICD-9, ICD-10 and CPT mapping, documentation, modifiers, and credentialing|
|Provide customized denial report to help track performance over time|
|Focus on most frequent reason for denials in the most efficient way possible|
|Identify the main reason of denial such as payer, location, specialty or provider|
MBC is the largest consortium of billers and coders providing medical billing across all 50 US States in varied specialties. Our billing experts also offer specialized billing services customized to practice managements needs which the physician can choose as per their requirements, like denial management services and so on.
MBC’s billing services uses all the necessary resources and updated processes to reduce denied, rejected, or underpaid claims with the help of the following tools
|Charge entry analysis||=||Tracking payer denials||+||Tracking claim status and resubmissions||+||In depth analysis|