How to Win with Denied Claims?

Article by Dan Schulte

For many hospitals and health systems, denied claims are just the price of doing business.

You wouldn’t be wrong to detect a note of fatalism in that sentence.

According to the Becker’s Hospital CFO Report, denied claims in 2016 had an estimated value of $262 billion. Digging deeper, the research found that these denied claims could cost hospitals an average of 1.5-5% of net revenue per year.

Time for Triage

It’s a simple fact: Claims denial management strategies implemented by many health systems may be seriously flawed, or non-existent.

This isn’t a knock against the claims denial team that is working hard on fixing problems. The complexity and scope of denials are among the biggest problems that providers face with claims denial management. The number of health plans they work with – sometimes as many as 150 – presents a daunt- ing task to control. The problem grows when each plan has its own rules for denied claims, including the reasons behind the denial and how it is communicated to the provider. It’s difficult to develop a consistently successful claims denial strategy based on so many variables.

Lack of automation also hinders a health system’s ability to check claims for errors or missing information before they are submitted for reimbursement. According to a 2016 HIMSS Analytics survey, 44% of providers use a vendor for claims denial management solutions or services, while 49% use either an in-house or manual process. Seven percent are unsure if they do anything at all.

In short, the reimbursement process – as currently designed and regardless of the outcome – costs an unacceptable amount of time, money, and resources. This inevitably leads to greater inefficiencies and administrative burdens and lower reimbursement.

Read More: HFMA  (Page 22)