Denial management in Medical billing

Posted by Ecareindia on June 24th, 2011

It’s true that effective denial management can increase healthcare collections to a huge extent.  For years and years, we know how the healthcare billing industry functions and how important it is to focus on denial management. We would be losing about 10% of collections as ‘uncollected’ amount if we don’t work on denial management effectively. That’s why denial management is given great importance, though every process is significant in medical billing.

Denial management requires more of analytical and decision making skills. Whether you work for a medical billing company or a physician’s office, the gauge of your expertise lies in how you deal with the denied claims and get it paid. Even for a tough denial, there is a possibility to get it accepted by the insurance carriers through a strong re-appeal. To do that, you have to be an expert in the field, be attentive to details, and actively look for industry updates. Most importantly, you should possess logical and out of the box thinking capability. 

Managing Denials:

Insurance carriers deny claims if it doesn’t comply with the insurance policies put forth by them. Therefore, a farsighted approach can help a lot in handling denials and avoiding reworks. We usually learn from the denials, how not to submit a claim. But, when you have to collect others’ money, you cannot experiment. Making repetitive mistakes can be extremely costly and you have to be smart enough to avoid any such denials in the future.

Let us see the four main steps to be followed to manage denials effectively:

1. Analyzing the root-cause behind denials: When a claim is denied, it is important to understand the root-cause issue rather than working to get the claim paid. When you don’t perform the root-cause analysis, you may get the claim fixed but you will get similar claims denied for the same reason. Working on same denials again and again will badly hit your progress and you will be doing unnecessary reworks which demand time and resource that can be utilized for process improvement.

1. Decision making: Once you have found the underlying issue behind the denial, all you have to do is decide how the issue can be fixed permanently so that you will not encounter such denials again. You have to do some groundwork before you arrive at a conclusion. Check if there are any loopholes in your solution. Put yourselves in the shoes of insurance carries and think. Remind yourself that you are working on deadlines and your decision has the power to reap incredible dollars. While doing so, you will be able to get a 360 degree view of the issues and decide accordingly. 

1. Corrective measures: Now, you have found the issue and decided on the solution, next is to implement it. Prepare a checklist, collect all necessary information and / documents and make calls if needed. Make necessary corrections in all appropriate areas of medical billing software. Screen-print the claim and audit thoroughly. Once you feel it is ready to go, re-submit it to the insurance carrier.

1. Document the solution:  Wait until the claim gets accepted. When the claim gets paid, immediately document the solution that aided payment of the claim and communicate it to peers who work on denial management so that everyone is aware of the solution to the issue.

Tips to effective denial management: 

1)      Maintain a separate file to enter the ‘cause for denials’ and ‘corrective measures’. When there is a peculiar case of denial, it should then be updated immediately in this file so that over a period of time, it would become a handbook for AR Analysts and would help them in managing denials more effectively

2)      Provider hand book contains enormous information on insurance policies. Referring to it will solve many issues with denial management.

3)      Whenever there is a new update in the industry, it should be communicated to all team members and alerts should be set in the medical billing software so that related errors will be avoided.

4)      Set up a ‘utilization review team’ that will do complete denial analysis and compare denial solutions provided to different client accounts to get best solutions out of it. The team will also work on under payments and provide readymade solutions to denial issues.

Give equal importance to these tips and make sure that you don’t miss out with new updates in the medical billing industry. Before you become aware that you had failed to notice the latest updates, you would be in a situation to face denials. Avoid it!

When claims can be denied for various reasons, we cannot bring all denials under a common roof, but in case of global actions we need to be more proactive to act accordingly so that we can avoid similar denials. Also, whenever there are denials, it is essential to prioritize, visualize the issues and take the necessary action. Following these tips can assure you more collections than expected.

About the Author:
Tanya Gill is the Public Relations Manager for ecare India based in Chennai, India. She has wide knowledge and experience in the medical industry. ecare India is a leading medical billing company offering end-end medical billing services and is backed by extensive domain expertise, latest technology and dynamic compliance norms. ecare is HIPAA compliant and is the first Indian medical billing company to get ISO 27001: 2005 certified for information security management. ecare is also ISO 9001:2008 certified for quality management. By providing outsourced medical billing services, ecare makes it feasible.