In the modern landscape of technologically-supported, value-based healthcare, many providers have reoriented focus on their claims denials management program. The efficiency of those programs, however, can vary significantly across organizations; the effect of denied and delayed rendered claims can be detrimental to the bottom line of healthcare facilities who lack a strategic, holistic approach. An insufficient claims system can cause net revenue losses, increase operating costs, and bog clinicians down with unnecessary administrative tasks.
Reworking denial processes is an integral part of any claims management system. While eliminating all claims denials is an unfeasible task, allocating too much time on reworking denied claims can be detrimental to internal operations and take time away from direct patient care. Addressing denials from a holistic perspective can increase organizational efficiency, leverage patient/provider relations, and help mitigate up to 90% of preventable denials.
Implementing data analytics is vital to the success of any denial prevention/resolution process. Data analytics is not a one size fits all solution, however, therefore providers must leverage their data to determine where specific problems lie and meet overarching goals.
To boost revenue with data analytics, providers must first identify where their root causes for denial lie; this could include patient access/registration, insufficient documentation, coding/ billing errors or payer behavior. Second, they must determine how implementing data analytics can benefit their revenue cycle management (RCM). Third, they must maximize the efficiency of pre-authorization processes, one of the most time-consuming, administrative burdens for nurses and physicians. Finally, providers must align their focus on claims denial prevention and revenue cycle management with the entire clinical platform.
While the problems and opportunities addressed in denial management will vary across healthcare facilities, the overarching goal is the same: to create a customized, organized prevention system that will mitigate claim denials, reduce administrative responsibilities, and streamline the appeal process.
How Data Analytics Can Help
As mentioned above, data analysis can pinpoint the causation of denials. Origin can vary from patient accessibility and insufficient documentation/registration to coding and billing errors or difficulties in utilization case management. Because many of these facets are interconnected, data analysis can help identify specific areas that deliver the most impact on RCM.
By pinpointing problematic sources, be it a certain physician, service line, or payer; a specific type of code; or a process in need of a redesign in both the clinical and revenue cycle areas, the gathered data can guide organizations in redeveloping subpar, costly operations. Using data analytics to enhance denial prevention requires all clinical parties and administrative staff to act on the multi-disciplinary effort; holistic efficiency will reduce denials and supports the organization’s revenue stream.
Revenue Cycle Prevention Strategies
30% to 40% of claims denials result from pre-service related challenges that prevent claims processing operations from running smoothly. Problems often originate from insufficient documentation during patient registration and are the easiest way to improve revenue. Minor errors in data entry can cause problems in otherwise routine claims, and eligibility denials often occur when a payer no longer claims responsibility for coverage.
Eligibility verification must be thorough for providers to address potential challenges and patient responsibilities beforehand, especially with ever-changing coverage plans and eligibility prerequisites. Deductibles, for example, can drop between the time of service and when a bill is posted. Cause analysis can determine whether the clinical staff is checking patient eligibility in a frequent, thorough manner. Ideally, providers should use multi-point eligibility checks, confirming eligibility at the time of scheduling, before service, on the date of service, and before submitting a claim. In all cases, if a problem is found, patients should be contacted within 24 hours, so there is a higher chance that they can still receive service.
Pre-authorization is an essential part of the claims process because it gives providers a starting point for RCM. The pre-authorization process is time-consuming, taking up more than 13 hours per physician per week, and accounts for more than 11% of claims denials. These denials typically result from failure to secure authorization in advance, or a clinically driven change in a procedure.
Medical procedures have specific policies managed at different levels, involving the payer, plan, employer, and group. Staff is required to evaluate claims and find commonalities which determine if a procedure needs authorization; this is a time-consuming, decentralized approach.
Implementing a more proactive approach creates a steady flow of information from the provider to the payer and back, which keeps requirements clear, increases efficiency, and conserves expert resources. The proactive approach involves multiple steps, including designation of a team to drive the pre-authorization and automation processes. Automation in pre-authorization screening, verification, payer policy maintenance, and authorization acquisition can all increase efficiency and reduce human error. Making sure that the pre-authorization team understands what is medically necessary is also helpful to identify places where denials may occur.
Because revenue cycle staff work with claims data daily, they are well-equipped to provide insight on prominent origins, and solutions for denials. Management should share and communicate data with relevant departments to gain the attention of different operations and departments. Operational reports should comprehensible and reviewed by all levels of staff.
Data should drive a successful denials management program because data can illustrate past problems and offer immediate opportunities for improvement. Action plans must always be flexible and ready to change in accordance with the healthcare industry as a whole, and communication between all levels of a healthcare organization is vital to their success. An organization with good plans and communication has everything it needs to reduce claims denials, increasing its own revenue and providing better patient care.