Skip To Navigation Skip To Content Skip To Footer
    Hire Physicians Who Fit, Succeed and Stay - Recruit a Physician - Jackson Physician Search and MGMA
    MGMA Stat
    Home > MGMA Stat > MGMA Stat
    Chris Harrop
    Chris Harrop

    When the dust settles after the Change Healthcare cyberattack, which caused catastrophic cash-flow disruptions, medical group practices will still face significant challenges in optimizing their revenue cycle management and securing swift reimbursement. 

    Our most recent benchmarking report, the 2023 MGMA DataDive Practice Operations data set, showed a single-specialty aggregate rate of 8% for claims denied on first submission — the same rate documented in 2019. [Get more insights from this data set by downloading our free August 2023 report, Restoring Balance to Patient Access and Medical Practice Operations.

    However, the short-term outlook around claim denials is not as rosy as that multiyear lookback: A March 5, 2024, MGMA Stat poll found that 60% of medical group leaders reported an increase in their practices’ claim denial rates for the current year compared to the same period in 2023. About 29% of respondents said denials are about the same as they saw this time last year, while only 11% said their practices have decreased their claim denials relative to early 2023. The poll had 235 applicable responses.  

    Among the practices experiencing reduced claim denials, respondents credited enhanced staff training for front desk workers and establishing a denials task force team dedicated to improving clinical documentation, eligibility verification and authorizations. These practices also noted either hiring additional coding and billing staff or having their coders pursue new training and/or certifications. 

    Claim denials early in the calendar year are nothing new in healthcare administration. New coding guidelines introduced each January often spur a spike in denials, either from actual coding mistakes or the failure to update payers’ configuration/claims adjudication systems. According to respondents whose practices saw denials increase or hold steady, the reasons for their most-recent denials largely centered on: 

    • Payers noting insufficient documentation 
    • Patient eligibility or incorrect ID numbers 
    • Untimely filings 
    • Incorrect modifier usage, especially Modifier 25 
    • Issues associated with changing to a new EHR, causing registration errors and authorization issues. 

    Additionally, many practice leaders reported an uptick in claim denials due to payers arbitrarily claiming lack of prior authorization, despite having it. Other respondents said their teams have also dedicated substantial effort on understanding insurers’ edits to claims and disputing inaccuracies. 

    Medical group practice leaders have also faced pressure to automate many elements of their RCM in recent years. As noted in a Feb. 27, 2024, MGMA Stat poll, most group practices have 40% or less of their revenue cycle operations automated. 

    Techniques to tackle high denials 

    In the recent MGMA webinar, “Future-Proof Your Practice with Advanced Techniques to Navigate RCM Challenges in 2024,” Conifer Health Solutions’ Michael McMann, vice president of client management physician services, noted the significant challenges medical group financial leaders have faced due to adjustments in payer mandates and reductions in Medicare physician pay rates over the past few years.  

    The steady stream of newly eligible beneficiaries opting to enroll in Medicare Advantage (MA) plans is another shift that practices must keep a close eye on, McMann added, as some plans have not been as timely in payment as traditional Medicare. “Typically it’s 30 to 45 days” to see payment on a clean claim from a Medicare Advantage (MA) plan, he said, whereas the timeframe is closer to 10 to 14 days for traditional Medicare. McMann also highlighted practices’ concerns with prior authorizations and higher initial and final denial rates with MA plans. 

    Practices should also closely monitor how commercial payers are scrutinizing other claims, especially ED visits. Whereas only a handful of insurers did this a few years ago, now “probably half the payers out there are looking very closely at ED visits and re-leveling” them. This trend leaves practices facing reduced compensation and necessitates providing additional documentation to justify higher-level claims. “You need to be informing providers to make sure they’re increasing the accuracy of their documentation to make sure that a Level IV visit is actually supported by what they’ve documented,” McMann said. 

    Tips from McMann for strategic improvements 

    • Maximize your practice management (PM) system to ensure you have strong claim edits, or charge review work queues on the frontend to stop any claims that don’t look right before submission. “If the age or gender of a patient doesn’t match up with the CPT code that’s being billed, that should get stopped,” he said. 
    • On the system’s backend, McMann emphasized using informed/intelligent denial remit work queues, particularly for directing work to a specific coder or team members especially proficient in a particular payer’s rules.  
    • Ensuring regular check-ins with your top payer representatives is an effective way to confront a “slew” of new denials due to changing payer rules and poor communication about it, McMann said. This dialogue can reveal issues such as providers’ out-of-date credentialing status, and provide guidance on where your staff's training/education should be focused. 

    Watch the full webinar on demand for even more insights on eliminating gaps in physician documentation, manual prior authorizations and eligibility verification. 

    Additional resources

    Chris Harrop

    Written By

    Chris Harrop

    A veteran journalist, Chris Harrop serves as managing editor of MGMA Connection magazine, MGMA Insights newsletter, MGMA Stat and several other publications across MGMA. Email him.

    Explore Related Content

    More MGMA Stats

    Ask MGMA
    An error has occurred. The page may no longer respond until reloaded. Reload 🗙