How to Reduce Insurance Claim Denials

Claim denials are an inescapable problem for any medical practice, especially because it is directly related to revenue and overall cash flow. Healthcare organizations' annual losses from denial write-offs range from as little as 1 percent of net patient revenue to as high as 4 or 5 percent, according to Advisory Board. Before we jump into reducing denials, let’s look at the difference between two commonly mixed up terms:


First, rejected claims cannot be processed by the insurance companies because they were actually never received nor were they entered into their computer systems. If the payer didn’t receive the claims, it cannot be processed. However, this type of claim can be resubmitted as soon as the errors are made correct. Some of the errors are easier to fix than others.


On the other hand, denied claims are different because they are defined as claims that were processed and a negative decision was made. This type of claim can be resubmitted as a corrected claim to avoid a duplicate denial, or based on the denial reason you may only have the option to appeal or send back for reconsideration. If the claim is resubmitted without an appeal or reconsideration request, it will most likely be denied as a duplicate. Now that we have an understanding of the differences between claim rejections and denials, let’s look at ways to prevent these occurrences.


1. Practice management software


Make the best use of all the tools of your billing system. Tools like insurance verification, claims status, electronic remittance, and many more are available to practices. These tools can expedite claims, processing, and collections and increase your efficiency. Not only can practice software help with claim denials, but it can also help to automate collections.


2. Create a proactive approach


It is important to make a fundamental shift to proactive denial management. Look for the most common reasons for denials in your practice and then work to put policies and procedures in place to minimize them. 


3. Partner with a medical billing specialist


Keeping the common reasons for claim denials in mind will help your practice create a proactive approach in dealing with these claims. If a practice properly interprets claims data and pays attention to the details, it is possible to prevent rejections and denials before claims are submitted.


EMMG offers a comprehensive suite of custom services covering all aspects of billing, collections and revenue cycle management. Because of our vast experience in physician billing and working with practices in virtually all medical specialties, we typically review and evaluate the current list of billable procedures to develop a tailored solution to help avoid claim rejections and denials. 


If you are interested in getting a custom billing plan in place for your practice or hospital, contact EMMG today!

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