Strategies to Reduce Medical Claim Denials and Improve Financial Performance (Full Transcript)

Speaker 1: For healthcare organizations, effective care is based on the unique characteristics of the patient. When a provider submits a bill or claim for payment, it is also subject to rather unique characteristics that influence if, how, and when it will be paid. In many cases, there are issues with the claim and the health insurance company or payer will deny or at least delay payment until the provider has responded to the issues. Payment delays and denials are a major challenge for providers, with an average of nearly 20% of claims being initially denied and the estimated impact of denials being approximately 2% of net patient revenue. So a mid-sized hospital doing $500 million in revenue could be losing $10 million every year to medical claim denials. Like many healthcare issues, the key to effective denials management is to prevent them in the first place. A recent study suggests that up to 86% of denials are preventable. So it's important for providers to have a sound denials prevention strategy. Analyzing and prioritizing your current denials are a great place to start. Identifying the denials with the greatest impact on the bottom line can help ensure you're aligning your efforts and resources appropriately. You also want to engage and educate your teams. It's crucial that they know the importance of confirming these details accurately and consistently for every encounter throughout the organization. An important part of the process is also knowing when to leverage partners and or technology. Bringing in outside assistance can yield tremendous insights. Third-party consultants who specialize in optimizing revenue cycle operations can analyze your claims management and denials trends and propose a denials prevention program featuring the needed corrective measures. Many providers look to adding revenue cycle technology to provide much-needed automation and analysis. With new data-driven insights and teams less constrained by manual processes, many providers can make substantial strides in reducing the issues behind claims denials. Eliminating claim denials entirely may never happen, but performing root cause analysis is the key to establishing a better denials management strategy. This will help providers make continuous improvements that reduce claim denials and improve overall financial performance.