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.
Revenue Cycle Denial Management has become a universal and often abused term in medical billing. Some individuals use the term to describe a means of addressing claims denied for medical necessity. Others use the term to describe how some information is tracked for a specific payer, set of procedures or a place of service. Still others try to use it to describe what they do daily in the physician’s office.
Given all of this confusion, how do you find out if your medical billing company or medical billing department is utilizing proper denial management for your practice? A good start is to ask a few simple questions: What do they believe denial management entails? What metrics do they utilize to measure denial management success? How much have they increased your collections in the past 6 months through their denial management system?
It is amazing how few medical billers or medical billing companies understand how proper denial management will dramatically increase the revenue of a practice. They understand the value of working denials, but this is not the only secret to good denial management. Working denials is like bailing water from a leaking ship - it can help keep the ship afloat, but ultimately you really need to fix the leak.
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.
What is typically missing from troubled billing operations is the lack of the management-reporting expertise needed to extract the data in a concise and meaningful way coupled with a lack of methodical, measured billing process needed to correct mistakes. A comprehensive Revenue Cycle Denial Management system has two main purposes. The first purpose is to provide feedback on why claims are denying and how many claims are not being paid on the first submission to the respective payers. The second is to fix these issues. Effective Revenue Cycle Denial Management software databases must be designed to track, quantify, and report on all denials for all payers.
The standard denial management output should track by payer, the number of claims denied and the reason for the denials. This must be coupled with a dashboard reporting tool for quick visual management. With these reports the billing team can easily identify which payers are inappropriately denying claims; they can also compare these payers to their peers for proper trending and follow-up. This output allows the medical billing team to develop and refine payer specific rules to prevent future payer denials by insuring all claims are clean when they are submitted.
The in depth analysis described above also allows payers that are habitual violators of Clean Claim Rules to be identified and pursued. The data and analysis will allow many opportunities for process improvements and revenue enhancement for the practice.
If you implement a powerful denial management system you can optimize your medical billing and speed up your cash flow. As previously mentioned, a strong denial management system can increase your collections by 20 percent or more.
Copyright 2008 by Carl Mays II
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