Denial Management is the Key Stone of Good Medical Billing
A well designed and executed Revenue Cycle Denial Management system can improve a medical practice or facility’s collections by up to 20 percent. If your medical billing team or medical billing company does not have a proper denial management system in place then you are, without question, losing money.
Some medical billers believe denial management is the same as follow-up, others believe denial management is primarily geared towards dealing with issues around medical necessity. Many medical billing experts simply think as denial management as a description for the overall medical billing process.
A good start to finding out if your practice is suffering from improper denial management is to find out from your medical billing service (or in-house medical billing manager) how they manage denials and how they measure success in this area.
Few billing departments appreciate the value a good Revenue Cycle Denial Management system can bring to a medical practice or facility. A robust Revenue Cycle Denial Management system provides methodical management data for the billing process; the data are then used to (a) increase and (b) accelerate cash flow.
Achieving powerful results from denial management requires data, data and more data. Your denial management system must report and measure all claims that are being denied by your payers. With this level of data your medical billing specialists can fix the issues that are leading to the denials (whether it be issues with the claims or issues with the payers) and stop the torrent of unpaid claims into your medical billing process. Once you do this, then revenues for your practice will increase; probably by 10 to 20 percent.
Three elements are typically missing from a practice or medical billing company’s denial management process: data, filtering/sorting methodologies and feedback to systematically correct errors. Most practice management systems do not properly track denials – at least not in the form in which they are typically used (i.e., they may have the capability, but only if properly implemented and used). Those PMs that do track denials typically overwhelm the practice with data that is difficult to utilize for high level denial management. Finally, even if the data is captured and can be properly utilized, most billing groups do not have a systematic way to get the information back into the billing process in a manner that prevents the denials from occurring again in the future.
Your denial management system must 1) Track all denials by payer; 2) Report on the reason for the denials and the number of claims denied for each reason; and 3) Allow for in depth analysis and comparison across payers to identify important trends. Once these capabilities are in place, the medical billing specialists can create targeted process changes and claim edits/rules that will fix systemic billing issues and increase collections.
With the analytical capabilities available, the medical billing department or medical billing company can identify systemic medical billing problems, create and test solutions to the problems and implement process changes that will increase collections AND drive down medical billing costs. One example of this is pursuit of Clean Claim Law violators with the denial data produced from the denial management system.
A real Revenue Cycle Denial Management system gives you a way to optimize and accelerate cash flow. It also prevents your practice from falling victim to the games that insurance companies play with your reimbursements. An established and proven denial management system will improve your revenues between 5 and 20 percent.
Copyright 2008 by Carl Mays II