A Complete Guide on Denial Management in Healthcare for 2023

Claims Denials Vs. Claims Rejections

There is a difference between claim denial and claim rejection, and it’s important to know from the perspective of a denial management services provider. A claim denial is when a particular claim is assessed and refuted by the insurance provider. On the other hand, a claim rejection happens when a claim submitted to an insurance payer analytics contains inpatient data or medical coding mistakes.  

Custom healthcare software solutions offer a wide range of tailored software to minimize errors in medical coding. These systems help reduce loss in revenue due to claims rejections. If we’re talking about denial management, we’ve got to look at some of the most common reasons for claims to be denied.  

Top Reasons for Claim Denials

1. Late Submissions

Many insurance payers stipulate deadlines within which claims need to be submitted. This is usually a fixed number of days after the medical treatment or service, and it may also include the time taken to work through initial rejections. Several automated healthcare solutions simplify the denial management process by automatically assessing claims to highlight errors while also alerting staff about approaching deadlines.  

2. Lack of Coverage by Payers

Different patients have varying degrees of insurance coverage. If a person receives treatment that isn’t included in their coverage plan, then the claim is sure to be denied. It is best avoided by verifying the details of the plans to check for eligibility. Healthcare software product development offers comprehensive, integrated healthcare solutions to help streamline the entire insurance verification workflow. They are integral to healthcare denial management. Automated verification is popular among physicians who integrate it with practice management solutions to improve the efficiency of non-medical administrative tasks.  

3. Missing Information

Over 50% of denials are because of missing information about patients. It could be demographic information or anything to do with patient health records. Poor electronic data interchange between different health systems may also lead to inadequate information. Ensuring that the data is entered properly is an integral part of any set of denial management tools.  

4. Coding Mistakes

Medical coding helps healthcare professionals describe and document the conditions of patients and the treatments carried out. Coding information is vital for claiming reimbursement from payers—mistakes in coding account for a significant percentage of denied claims. An important aspect of denial management analytics is preventing or minimizing coding mistakes. Several medical informatics solutions help providers identify problems in coding procedures. Almost every leading service for denial management in medical billing includes provisions for preventing coding errors.  

Best Ways to Prevent Denials

Healthcare claim denials cost billions of dollars to the healthcare industry. Most denial management companies recommend a few basic steps to reduce them –   

1. Analytics

Smart analytics solutions have helped several industries optimize their performance and improve productivity. When it comes to healthcare denial management systems, analytics can play a central role in filtering out claims that are more likely to be denied.  

Furthermore, those claims can later be corrected before submission, thereby reducing the possibility of a denial. Hospitals and practices need not even install healthcare denial management software to analyse claims on-premises. Healthcare cloud computing has enabled them to be hosted remotely and accessed from any authorized device. It would go a long way in implementing best practices in denial management medical billing.  

2. Staff Training

A well-trained staff is a cornerstone of efficient business operations. An adept team of healthcare professionals must be adequately trained to ensure that there won’t be any reasons for claims to be denied. However, an established protocol to deal with denials will boost the denial management workflow and ensure timely reimbursements even if it does happen.  

3. Denial Management Solutions

Denial management in healthcare has grown to become a sub-industry that requires dedicated professionals. But when dealing with something as complicated as billing and reimbursements, it is better to have a dedicated revenue cycle denial management solution.  

Such solutions streamline the entire medical billing denial management process to eliminate human errors. A beneficial side-effect of this is an improvement in revenue cycles for providers. The covid-19 pandemic moved physician consultations online. As a result, telemedicine platforms gained popularity as travel restrictions gripped the country. This was an opportunity for denial management solution vendors to advance telehealth solutions by integrating their applications into telehealth software.    

4. Automation

As mentioned earlier, automated solutions for denial management in healthcare eliminate human errors, a major cause for rejections and denials. Mistakes in coding, data entry, or missed deadlines make up most denied claims. So, it makes sense to automate activities within medical billing denial management. Such a solution not only helps providers but also indirectly helps patients. That’s because automated solutions for administrative activities allow providers more time for patient care.  

Conclusion

Technology solutions for denial management in healthcare improve revenues for providers. Moreover, as they automate and optimize non-medical administration, they also reduce waiting times for patients. Integrating a platform for denial assessment with EMR and third-party medical applications like patient engagement systems and remote health monitoring systems results in a consolidated healthcare system. A system like this will improve the quality of care, increase provider revenues, and reduce payers’ bottlenecks. To sum it up, a good, reliable, and integration-compatible solution for denial management in healthcare would benefit all the stakeholders.