Claim denials cost hospitals and doctor's offices billions of dollars every year, and almost every provider is affected. Denials management is one of the few ways organizations can battle this problem, but taking care of the issue in house comes with a lot of challenges and pitfalls. Hiring a third party to appeal and help prevent denials is often the most efficient and cost effective fix. Here are 8 reasons why outsourcing may be the right solution for healthcare providers:
1. Multiple Medical Necessity Denials
Payers deny claims due to medical necessity even when a provider may find a treatment or procedure absolutely essential. It's normal to think these denials are arbitrary and harmful to patients, but there are remedies. Companies who specialize in denials management have the resources and knowledge to fight medical necessity claims aggressively. They have extensive experience constructing powerful arguments against payers by showing that the care delivered was life saving and demonstrably necessary. In the event that a denial is irreversible, professionals can help providers avoid getting into the situation in the future.
2. Few Proactive Edits for NCDs and LCDs
Local Coverage Determinations (LCDs) and National Coverage Determinations (NCDs) tell providers which healthcare services will be covered by Medicare on a national and local level. Making proactive edits to claims according to these determinations is required to prevent excessive denials from CMS, but this can be prohibitively expensive for some providers due the knowledge and research required. Companies that provide outsourcing services stay up to date on all NCDs and all relevant LCDs that affect any given area.
3. Staff Continually Overturns
It takes time for staff members at any hospital or office to learn the procedures of denied claims. When a provider experiences high turnover, mistakes are likely to happen often, leading to excessive appeals rejections. A company that specializes in denied claims management continually employs professionals who have extensive experience and training in claims submission and appeals with a variety of payers both public and private. That means the revenue stream won't completely depend on one or more staff members maintaining their employment permanently.
4. Inconsistent Use of Standard Coding Rules
Organizations that don't consistently apply standard coding rules can experience a very high level of denied claims. Whether a staff member mismatches a procedure with the relevant ICD code or uses a recently deleted CPT code, fixing and preventing errors can be very challenging without outside help. When providers filter their claims through a professional denials management service, any incorrect coding can be adjusted to adhere to standard rules, lowering the chances of an initial denial or rejected appeal.
5. Excessive Denials Due to Untimely Filing
Healthcare staff work hard to take care of patients and ensure that all appropriate documents are filed on time, but mistakes can happen for a variety of reasons. There are a wide range of deadlines depending on how many payers are involved, and some claims require filing in as little as 15 days, putting a lot of pressure on staff. When denied claims pile up due to untimely filing, it's likely that personnel just have too much on their plate. Rather than hire someone new or overwork existing employees, outsourcing to a management service that has the resources to file all claims on time can drastically increase revenue.
6. Large Volume of Denials in Certain Codes
Continual denial for specific groups of codes usually indicates an issue with a particular department, procedure, or perhaps individual. Fixing the issue requires careful analysis of the involved codes and finding out where the errors are occurring. Denied claims specialists have expertise diagnosing specific coding issues and helping providers implement changes that prevent the problem from continuing.
7. Lower Clean Claim Rates, Increased AR Ageing
A downward trend line for clean claim rates and a rising trend line for aging accounts is a bad sign for any type of business that relies on insurance payments. Reversing these trends in house can be difficult due to overwhelming workloads and stagnant habits. An outside claims expert can analyze the whole picture and find specific areas of improvement that will have the biggest impact on revenue. Outsourcing claims to a third party vendor frees up time for the inside staff to focus on what they do best - care for patients.
8. Converting to a New EMR System
Shifting to a new EMR system can be a steep learning curve for many staff members, resulting in increased denials. Outsourcing helps solve this problem by relieving some of the burden. Professionals can spot problems as they are occurring and notify the provider before they become habit. An experienced claims denial professional recognizes the most common issues with new EMR systems and has solutions ready to go.