Denied Claims ? An Analysis

Posted by Ecareindia on July 1st, 2014

Increased medical claim denial is the first thing that US medical billing companies should expect after the continual introduction of healthcare reforms. Even if a huge sum is invested on upgrading software and in implementing the various healthcare changes, US medical billing companies can recover most of the investment through increased reimbursements. Well-planned denial management and medical billing AR follow-up are the prime factors that contribute to proper and timely reimbursements. Let us analyze the various causes of why claim denials happen and how they can be handled prudently by outsourcing medical billing:

Reasons for Claim Denial:

· Error-prone medical claims processing, with no periodic review is the prime reasons of claim denials.

· Healthcare entities that fail to manage claim denials prudently are at the risk of facing a huge AR pile up and backlogs.

· Medical billing AR follow-up would be hard if healthcare entities use an outdated medical claims processing software with limited reporting capabilities.

· Even after implementing many of the best practices, some US medical billing companies still face high rates of claim denials. This is due to the fact that the existing medical claims processing models have been restructured with the new healthcare changes and they have failed to apply the new rules to their system.

What Research Says?

From the CMS’ claim denial statistics, we understand that only 70% of claims get reimbursed the first time they are submitted. The remaining 30% claims are either rejected or considered lost. Healthcare entities that do not have a proper medical billing AR follow-up and denial management team will hardly have the time for resubmitting the denied claims. The statistics also confirm that 18% of the claims are never collected.

A research conducted by the Medical Group Management Association (MGMA) found that 7 to 11% of US medical claims processing companies are underpaid. On the whole, it is estimated that healthcare entities lose 25% of their reimbursement value, just due to the inability to follow-up on denied claims.


· Timely Filing: Submitting claims before the expiration of the due date is very important.

· Proficient Denial Management: Healthcare entities must set up a dedicated denial management team that is skillful in analyzing the root cause for claim denials and bridging the gaps.

· AR Follow-up: The medical billing AR follow-up team must work the claims prudently to avoid AR inflation. The denied claims should be corrected and re-submitted as early as possible.

· Outsourcing Medical Billing: Due to the rapid healthcare changes happening in the US, many US based medical claims processing companies are finding it hard to perform denial management and AR follow-up diligently. Therefore, they can get help from reputed offshore companies like e-care.

About e-care India:

e-care India delivers diligent AR and Denial management services with total customer satisfaction. With 14 years of experience in the industry, e-care’s 3 offshore medical claims processing delivery centers have been providing end-to-end medical claims processing services and denial management seamlessly to its clients. To know more about e-care and its services, log on to

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Joined: June 20th, 2011
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