Importance of Managing Denials

Posted by Ecareindia on June 26th, 2012

US health care industry is largely dependent on successful reimbursements from claims made to insurance payers. However, many a time these claims are denied by insurance companies. There may be several reasons for Denials, like coverage issues with that particular scheme or insurance policy, system of co-payments, minimum pay limit, timely filing, medical coding billing related and so forth.

Whatever the cause, it is a known fact that by careful management of denials, revenue cycle management and physician revenues can be improved by up to 10% than without proper denial management. In most entities, Medical Billing and Coding staff members sort out these issues, but virtually any member of the physician billing office can learn the basics of denial management by self-training and by following a few simple rules of Managing Denials.

Basic rules of Managing Denials:

.Depending upon the setting you are working in, the specifics of denial management may vary, but the basics remain the same, regardless of whether the denials involve a physician billing office or the revenue cycle management department of a hospital or medical billing company.

The first step involves identifying and working out the causes that led to the denial of a claim, second step involves devising policies to avoid any such issues in future and also fixing the current situation by careful Analysis of the denied claim. After successfully re-submitting and getting the claim paid, make permanent changes in your billing software and address the situation and possible scenarios to your colleagues so as to prepare everybody to deal with similar situations. Last but not the least, all paper records must be maintained at all costs and any changes made must also be documented for future reference.

Moreover, if any changes in the billing system or EHR software are made, it is very important to issue a complete hand-out or information leaflet to help other staff members in understanding why that change was made in the system and its importance.

Importance of Managing Denials:

Although there are a number of reasons, why claims get denied by insurance providers, it is important to deal and prioritize each case according to the (1) amount of cash involved, (2) cause of denial and (3) need for interventional correction in the system. With successful Denial Management, Physician billing offices and Revenue Cycle Management teams can achieve: