Challenges of Claims Denials
Claims denials are a major challenge for healthcare providers in the United States. According to the Medical Group Management Association (MGMA), the average claim denial rate in 2023 is 7.5%. This means that for every $100 in claims submitted, healthcare providers are losing an average of $7.50 to denials. But why do claims get denied in the first place?
The top five reasons are:
- Incorrect or incomplete patient information
- Improper coding
- Non-covered services
- Missing or inadequate documentation
- Lack of medical necessity
While some claims denials are unavoidable, many can be prevented with careful attention to detail and a thorough understanding of the claims process.
The Financial Toll of Claims Denials
Denied claims are more than just an inconvenience; they have a direct impact on the financial health of a medical practice. Here’s how:
- Cash Flow Disruption: Denied claims mean delayed payments or, in some cases, no payment at all. This disrupts the cash flow of the healthcare provider, making it challenging to cover expenses like salaries, rent, and equipment costs.
- Increased Administrative Costs: Dealing with claims denials requires additional administrative work. Staff must review and appeal denials, which consumes valuable time and resources that could be better spent on patient care.
- Provider-Payer Relationship Strain: Frequent claims denials can strain the relationship between healthcare providers and insurance companies. A tense relationship can lead to delays in processing future claims or even provider contract terminations.
Strategies to Overcome Claims Denials
Now that we’ve dissected the challenges of claims denials, let’s explore some strategies to overcome them and ensure a smoother billing process.
- Streamline Data Entry: Minimize errors by implementing robust data entry processes. Use electronic health records (EHR) systems that can reduce manual input and the likelihood of mistakes.
- Staff Training: Invest in staff training to ensure they are well-versed in billing procedures, coding, and insurance requirements. Knowledgeable staff are your first line of defense against denials.
- Automate Prior Authorization: Implement systems that automate the prior authorization process. This helps ensure that necessary approvals are obtained before providing services.
- Regular Audits: Conduct regular audits of your billing processes to identify and rectify errors before they lead to denials.
Insights for Healthcare Providers
There are a number of things that healthcare providers can do to tackle the challenges of claims denials, including:
- Verify patient eligibility and coverage: Before providing any services, verify the patient’s eligibility and coverage with their insurance company. This will help to ensure that the services are covered and that the patient is responsible for the correct co-pay or deductible.
- Obtain prior authorization: If prior authorization is required for any services, obtain it from the patient’s insurance company before providing the services.
- Review claims before submission: Before submitting claims, review them carefully for any errors or omissions. This will help to reduce the number of denials.
- Submit complete and accurate documentation: When submitting claims, be sure to include all of the required documentation. This includes the patient’s insurance information, the date of service, the procedure code(s), and the diagnosis code(s).
- Implement a denial management process: Providers should have a process in place for reviewing and appealing denied claims. This process should be efficient and timely to ensure that denials are resolved quickly.
- Invest in training: Providers should invest in training for their staff on medical coding and billing procedures. This can help to reduce the number of coding errors and incomplete claims.
- Use a medical billing company: A medical billing company can help providers to manage their claims and appeals process. This can free up providers’ time and resources so that they can focus on patient care.
By following these tips, healthcare providers can take steps to reduce the number of claims denials and improve their financial performance.
About Medical Billers and Coders (MBC)
Medical Billers and Coders (MBC) is a reliable medical billing company that can help you tackle the challenges of claims denials. We have a team of experienced and certified medical coders and billers who are experts in all major insurance payer policies. We also have a dedicated denial management team that works tirelessly to appeal denied claims and get them reimbursed.
MBC can help you reduce claims denials in a number of ways, including:
- Accurately and completely coding and billing claims
- Verifying patient eligibility and coverage
- Obtaining prior authorization for required services
- Submitting complete and accurate documentation with all claims
- Following up on claims with insurance payers to ensure timely processing and payment
We also offer a variety of other services to help you improve your revenue cycle, such as patient collections and account receivable management. If you are looking for a medical billing company that can help you reduce claims denials and improve your financial performance, MBC is the right choice for you. Contact us today at firstname.lastname@example.org / 888-357-3226 for a free consultation.