The US Healthcare industry runs on a complex chain of processes. Providers deliver care to patients but rely on institutional payers (such as health plans and insurance companies) to earn most of their revenue in the form of claim reimbursements. While the treatment decisions are made and executed by the provider, the payer has the ability to interpret certain rules around what is covered and what falls outside the scope of their contract with the patient. The provider cannot just hand over the bill and expect to receive the money without scrutiny. Claims require thorough and accurate documentation as well as specialized attention.
Every claim that gets denied by the payer is a leakage from the revenue expected by the provider. This puts a strain on resources, leading to a negative impact on the quality of patient care in the long term. Clearly, the provider’s goal is to minimize the number and value of denied claims.
Hospitals typically manage their denials at 2% to 5% while individual physicians and practices may face slightly higher denial rates if their revenue cycle isn’t optimized. Across the sector, the American Association of Family Physicians (AAFP) estimates suggest that denial rates of 5% or less of the total claim value would point to a financially robust practice.
Here are 5 strategies you can use to optimize your revenue cycle and eliminate the threat of excessive denials.
- Accurate clinical documentation
Healthcare providers that invest time and resources towards ensuring the standards of their clinical documentation have a clear advantage in reducing their claims denial rate. This may be achieved through an organization level focus on the training of clinical staff and strategic implementation of technology solutions such as EHR platforms that can aid accurate clinical documentation. - Data insights and intelligent automation
A disciplined approach to collecting denials data, and appropriate technology platforms that effectively analyse this at various levels can yield tremendous value by uncovering trends, patterns, and root causes associated with denials. Healthcare providers are thus able to pinpoint and rectify recurring issues in their revenue cycle, including coding errors, prior authorization issues and documentation quality problems. - Define, assign, analyze and support
A clear and streamlined workflow, where each stakeholder has a well defined responsibility at every step, can boost speed as well as accuracy in claims processing. When denied claims are reprocessed, this allows easy identification and resolution of issues. Implementing automation will help infuse efficiency into the system and also help minimize the impact of denials over the long term by reducing the cost of resolution. - Train your team for continuous improvement
Onboarding the right talent to manage your revenue cycle woHealthcare providers that invest time and resources towards ensuring the standards of their clinical documentation have a clear advantage in reducing their claims denial rate. This may be achieved through an organization level focus on the training of clinical staff and strategic implementation of technology solutions such as EHR platforms that can aid accurate clinical documentation.uld be an unsustainable venture without appropriate investment in training programs to help maintain their sharp edge. Preventable denials can be reduced by continuously updating staff knowledge and periodically revisiting the organization’s best practices. Specialized RCM service providers tend to have an edge over in-house talent in this aspect. - Build strong relationships with payers
Healthcare providers who rely on payers to generate their revenue must have strong links with these institutions at various levels of the organization. This includes timely updation of protocols, proactive resolution of coding disagreements, qnd open communication lines to make clarifications as well as to negotiate ambiguities in decisions. While standardized platforms can preempt tech incompatibilities, encouraging some rapport among the organizations can better eliminate frictions that affect revenue cycle performance. This ROI is visible in the trend of lower denial rates in hospitals and chains in comparison with individual physicians and practices groups.
A robust appeals strategy that focuses on value opportunities and prioritizes denials based on financial impact and likelihood of successful appeal can deliver tremendous value in the latter end of a claims process. Accuracy, comprehensive supporting documentation and persuasive arguments will be essential for success. Feed the appeal success data back into the claims processing system to gain relevant insights and further streamline the strategy. Work with your revenue cycle experts – whether in-house or outsourced – to identify a viable target for claims denials that’s appropriate for your business versus the investment required to optimize from where it stands today.
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