Claims denial is one of the biggest reasons that numerous urology practices are shutting their businesses. Not getting paid for the services provided may lead many physicians into depression. That’s why having dedicated urology medical billing services that efficiently scrubs each claim is a necessity.
As a practicing physician reducing claim denials should be an ongoing effort to improve office efficiency and cash flow.
A recent research report published by the American Medical Association (AMA) discovered that on an average almost $15,000 per year is spent on investigating, appealing and reworking denied claims. Having a high denial rate lead to wastage of time and money spent on reworking and resubmitting claims to payers.
However, the good news is that there are certain actions you can take to help your practice reduce denials. The tips mentioned below will help you understand how your urology practice is performing and help monitor denials, so you can at a minimum maintain the industry standard denial rate of 3% to 5%.
Here are 3 steps to lower your denial rate and implement proactive strategies to ensure a smooth cash flow.
What is your current denial rate?
To calculate your current denial rate, add the total amount of claims denied by payers within a given period. Then divide that amount by the total dollar amount of claims submitted within the given period. To give you an example, look at a three-month period. If your total dollar amount of claims denied within this period is $10,000—and your total dollar amount of claims submitted is $100,000—then your denial rate is 10%. Simple!!
Remember to calculate the denial rate according to the payer, the reason for denial, provider, specialty type, and location, if your urology practice includes multiple locations.
What are major reasons for denials?
These reasons for denial will vary according to the practice. You can start by compiling your claim adjustment reason codes. Though these codes may be somewhat cryptic as well as inconsistent across payers, they at the least provide a foundation, on which you can build a denial management strategy.
Go deep and map the codes to more actionable descriptors so you can dig into your data at a more granular level and identify the root cause of the problem.
Consider categorizing denials according to these common reasons:
- Claim not submitted within timely filing guidelines
- Demographic errors (e.g., wrong spelling of the patient’s name or wrong date of birth)
- Duplicate claim
- Eligibility expired
- Global charges were billed when only the professional or technical component should have been billed
- Incorrect insurer address
- Incorrect modifier
- Invalid procedure and/or diagnosis code
- Lack of medical necessity
- No referral/authorization
- No supporting documentation
- Payer requires additional information from the patient
- Provider not permitted to see the patient under the plan
- Service not covered
- The wrong insurer billed
Hire a certified medical billing company or a revenue cycle manager
Hiring dedicated medical billing companies will help your urology practice to track denials and improve your chances of submitting error-free claims.
More specifically, the medical billing company can:
- Serve as a resource to clarify code combinations, definitions of modifiers, documentation requirements, and more
- Confirm codes that the urologist chooses in the EHR
- Note inconsistencies between procedures documented and supplies ordered but not billed
- Find missed charges based on progress note documentation
Denial rate if not managed by a professional may lead your practice to financial disaster. If the in-house team is inefficient to handle the claims flow, hire a professional medical billing and coding services for improved results.
FAQs
1. Why is reducing claim denials crucial for urology practices?
Reducing claim denials helps improve office efficiency, ensures timely reimbursement, and avoids wasting time and money on reworking denied claims, which can significantly impact cash flow.
2. How can I calculate my practice’s denial rate?
To calculate your denial rate, divide the total dollar amount of denied claims by the total amount of claims submitted within a given period. A denial rate above 3-5% signals the need for improvement.
3. What are some common reasons for claim denials in urology practices?
Common denial reasons include demographic errors, duplicate claims, incorrect codes, eligibility issues, and lack of medical necessity. Identifying and addressing these can reduce denials.
4. How can a certified medical billing company help reduce denials?
A certified billing company can clarify coding issues, ensure proper documentation, track denials, and submit error-free claims, ultimately improving your chances of reimbursement.
5. What are the risks of not managing claim denials properly?
If denials aren’t properly managed, they can lead to significant financial losses, increased workload, and potentially jeopardize the practice’s financial stability and reputation.
