Revenue Cycle Management (RCM)

Comprehensive Approach for Denial Management

Denied claims offer lots of challenges for any practice owner. Your billing staff is already busy verifying patient and insurance data and trying to submit clean claims. And when claims are denied, they have to work on these denied claims once again from the start. Ideally, when you submit 100 claims, not more than 10 claims should be denied. But for some practices this denial claim percentage could be as high as 30 percent or more. The Healthcare Financial Management Association (HFMA) reported earlier this year that, out of $3 trillion in total claims submitted by healthcare organizations, $262 billion were denied, translating to nearly $5 million in denials, on average, per provider. Imagine the struggle of the medical billing team in such practices to submit new claims as well as reworking denied claims within a timely filing limit. In this article we discussed how the denial management process is linked with other medical billing processes and having a comprehensive approach for denial management could help you to bring down denied claim percentage drastically. 

The Real Cost of Denials

As a practice owner, you’re well acquainted with the constant struggle of submitting clean claims that result in efficient reimbursement. You will be really surprised to know how much money is lost on working on denied claims. When you are handling denials, you are dealing not only with the cost of the denial but also the cost to pay staff to keep reworking them. Plus, denial management requires your most experienced resource to work on denial rework and appeal. Your experienced resource who should be spending maximum time submitting clean claims is now working on denials, which results in delays in new claim submission and ultimately insurance reimbursements. Denials actually cost you a few times more than their combined allowed dollar amount. Many practices assign resubmission of denied claims to staff with already bloated workloads, which increases stress. Apart from losing reimbursements, you could also be facing a potentially higher employee turnover rate due to such burnout. 

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Submitting Clean Claims

Submitting clean claims gives you assurance that the payment will be made in a timely manner from both private and government insurance payers. A clean claim rate parameter is crucial to measure the financial performance of your practice. As per industry standards, a clean claim rate should not be less than 90 percent. Submitting clean claims means the claim spends less time in accounts receivable, less time at the payer, which means quicker payments for you. Most of the time you will receive denials due to: wrong/absence of patient data, filling the information in wrong fields, failure to validate insurance benefits, and absence of follow-up for supporting documents. 

Taking Prior Authorizations

Equally as important as submitting clean claims is ensuring a streamlined, consistent prior authorization (PA) process is in place. Front-office staff may seem like the best people to take prior authorization, but in reality, every staff member should have at least some basic understanding of how to verify a patient’s eligibility. This should include how prior authorization is done and what to do if mistakes are made. Clinical staff who recognize discrepancies within prior authorization should have administrative staff double-check prior to treatment, in order to avoid providing non-covered services and an unpaid claim. 

Avoiding Common Denials

Most denials are the result of technical errors or simple oversights that could be prevented with a thorough review process. Avoiding common claims denials is a great way to reduce your overall denial percentage and help heal your revenue cycle process. Some of the common denial reasons are: claim not filed on time; the claim is non-specific; the claim is missing information; duplicate claim, Incorrect diagnosis coding; Incorrect or missing patient information; and lack of documentation. Taking the time, on the front end, to make sure claims are as accurate as possible before going to the payer will save you from the lengthy, tedious appeals process. 

Just focussing on clean claim submissions won’t help you to bring the denial rate below 10 percent. Even by following best practices, denials happen. If you receive a denial, you should always submit an appeal. Submitting appeals for denied claims takes more time and resources, but if the money is rightfully owed, then you need to pursue reimbursement. Your provider performed a service and reimbursement should always be paid for services rendered. Billing team teams should work together to identify the underlying causes of repeated denials and reduce preventable, repeat billing errors. 


Denials are part of practice operations, but they shouldn’t take up so much of your workflow that they distract your team from providing exceptional patient care. A small denial percentage is expected and manageable. As a practice leader, it’s your job to keep claim denial rates from getting out of hand. If you’re unsure about how to tackle your denials, it may be worth contacting MedicalBillersandCoders (MBC). We are known for providing quick and accurate medical billing services. Our services include patient demographics, charges, payment posting, eligibility, and benefits verification, prior authorization, accounts receivable management, denial management, provider credentialing, and others. To know more about our billing and coding services, please contact us at 888-357-3226

Get your personalized and free consultation on how MBC denial management services can help reduce your denial percentage and drive up your revenues and cash flow


Medical Billers and Coders

Catering to more than 40 specialties, Medical Billers and Coders (MBC) is proficient in handling services that range from revenue cycle management to ICD-10 testing solutions. The main goal of our organization is to assist physicians looking for billers and coders, at the same time help billing specialists looking for jobs, reach the right place.

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