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.
There is a lot of confusion about the definition of denial management. If you ask five medical billing experts what this means you will probably receive six answers.
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.
The system accomplishes this needed service by tracking, quantifying, and reporting on every claim billed for which any payer denied the service. The reporting should be comprehensive, tracking all denials (not just selected denials). If used properly, the system can reduce first-time claim denials by over 50 percent. Many practices have no way of monitoring if payers are denying their claims at excessive or unwarranted rates, or even for what reason. These practices are probably losing 10 to 20 percent of their total revenue.
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.
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
There is a lot of confusion about the definition of denial management. If you ask five medical billing experts what this means you will probably receive six answers.
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.
The system accomplishes this needed service by tracking, quantifying, and reporting on every claim billed for which any payer denied the service. The reporting should be comprehensive, tracking all denials (not just selected denials). If used properly, the system can reduce first-time claim denials by over 50 percent. Many practices have no way of monitoring if payers are denying their claims at excessive or unwarranted rates, or even for what reason. These practices are probably losing 10 to 20 percent of their total revenue.
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.
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
About the Author:
Carl Mays is President & CEO of ClaimCare Medical Billing Services, a medical billing company that serves clients across the U.S. Carl has been assisting clients with Medical Billing challenges and practice management solutions for more than 10 years. You can learn more about medical billing challenges and solutions by reading additional medical billing articles by Carl.
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