Data Insights

Strategies for avoiding common insurance denials

MGMA Stat

Coding & Documentation

Reimbursement

Katie Nunn MBA, CMPE
The Medical Group Management Association’s most recentrecent MGMA Stat poll asked healthcare leaders: “What is the root cause of claims denials/pends for your organization?” In response, the majority, 36%, answered “missing information,” while 31% reported “prior authorization,” 15% said “eligibility,” 5% stated “out of network” and 13% responded “other.”
This poll was conducted on September 24, 2019, with 782 applicable responses.

Physician practices deal with insurance denials on a daily basis. Denials not only potentially lower the organization’s reimbursement but also create more work for the billing staff charged with identifying why the claim was denied, fixing the issues and resubmitting the claim for payment.
According to Ellen Andrusia, billing director, Pulmonary Associates of Richmond, a simple denial can take a seasoned biller two to eight minutes to work, whereas a complicated denial, often involving prior authorization requirements, can take up to an hour to work, especially due to long on-hold times with payers.

Denials also slow down payments. Scott Decker, chief executive officer, All Right Medical Management Services, states that payment can be delayed three to six weeks because of denials. Andrew Harding, vice president, customer success, Rivet Health, estimates that each denial can cost a practice up to $100 in staff time per appeal submitted.

It is important to understand the root causes of denials, determine ways to avoid them and come up with solutions to deal with them when they do happen. However, no matter how good your processes are, you will still have denials. Some of the most common reasons cited for denials are:
  • Prior authorization not conducted
  • Incorrect demographic information, procedural or diagnosis codes
  • Medical necessity requirements not met
  • Non-covered procedure
  • Payer processing errors
  • Provider out of network
  • Duplicate claims
  • Coordination of benefits
  • Bundling
  • Patient no longer insured.

Start with solid training at the front desk

When it comes to claims denials, an ounce of prevention is worth a pound of cure. Decker states that more than many of the denials his billing company sees are from errors made at registration. Common issues include capturing incorrect primary and secondary insurance coverage or the policyholder being wrongly identified.

To reduce the likelihood of registration errors, it is vital to not only train new employees, but to have ongoing training and reinforcement of the importance of accurate data capture. Eric Krepfle, senior director, product management, Change Healthcare, has a mantra of “clean claims get paid faster,” which underscores why a good training program is essential.

To that end, find ways to make training fun. One approach is to provide registration staff the training information and then quiz them on it. If they correctly answer all the questions, they are entered into a raffle to win a small prize or receive recognition.


Build good relationships between billing and the front desk

It’s also vital to encourage a good working relationship between the front desk and the billing department. One way to encourage a positive culture is to cross-train front desk staff and the billing department. Spending a day in another position is a great way to learn the importance and the impact of your mistakes on the rest of the team. Furthermore, it helps if staff are more understanding when coworkers make mistakes.


Prioritizing denials management work

Payers also make mistakes that cause claims denials. According to Audrusia, these are typically the denials that take the most time to correct. That’s why it’s important to train your billers well in dealing with these types of denials. From a remediation mindset, Harding says workflow management tools that prioritize and categorize tasks can turn many denials teams into super users. A denials/follow-up rep can be assigned hundreds or even thousands of denials at any given point, so time is typically spent understanding the scope of the denial and previous notes/actions. Knowing your next step and then following up with that action in the appropriate time is incredibly impactful in workflow prioritization.

Tracking denials is critical to determine internal patterns, as well as those with specific payers. In larger practices it can be difficult to effectively track denials, but there’s technology that can help with this. Having the ability to track denials allows you to spot trends and identify solutions. For example, if you have a payer that is consistently denying a claim, you can talk to your provider representative and show them your data on how frequently you are getting this denial.
 
Krepfle states that most revenue cycle management systems have built-in tools that help manage denials and allow practices to drill down for root cause analysis. If these tools are not available, creating a shared spreadsheet that all your billers can access can assist in managing denials. Track the payer, responsible staff member, the reason for the denial, what is required for resubmission, any appeals issues and final resolution.
 
Tracking these issues will not only streamline your billing processes and increase reimbursement but will also help you identify where you need to focus your staff training. Krepfle also suggests using “scorecards” to motivate billing staff and develop rewards for individuals or departments.
 
Additional resources  
Would you like to join our polling panel to voice your opinion on important practice management topics? MGMA Stat is a national poll that addresses practice management issues, the impact of new legislation and related topics. Participation is open to all healthcare leaders. Results of other polls and information on how to participate in MGMA Stat are available at: mgma.com/stat  

This poll was conducted in collaboration with Change Healthcare.

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About the Author

Katie Nunn
Katie Nunn MBA, CMPE
Bright Ideas Medical Consulting

Katie Nunn, MBA, CMPE, recently founded Bright Ideas Medical Consulting to provide training and coaching for healthcare leaders and their organizations on process improvement, financial optimization and cultural transformation. With more than 20 years' experience in healthcare leadership, her areas of expertise include organizational leadership; process improvement; financial, operational and personnel management; IT implementations; telemedicine; space and strategic planning; communications; and cultural transformation.
She served as the chief administrator for Pulmonary Associates of Richmond from 2008 to 2019. PAR is one of the nation's largest private pulmonary practices with 32 physicians and 22 advanced practice clinicians.  Over her 11 years at PAR, she drove substantial change, resulting in a 300% increase in revenue and a 32% increase in shareholder income, while increasing employee and patient satisfaction.

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