What is Denials Management? How to Implement an Effective Denials Remediation Program

What is Denials Management? How to Implement an Effective Denials Remediation Program

What is denials management? Claims denials, or medical claims that have been denied for reimbursement by the payer/insurance provider, can pose a considerable threat to a healthcare facility’s revenue cycle if left unchecked. In addition, a lack of standardization in the practice’s policies, procedures, and level of coding quality can contribute to denied claims and lack of accountability. So, denials management is the action of created standardized procedures for how to address denied claims.

Types of Denials

Denied claims consist of two categories: soft and hard. Payers may reimburse soft denials if the coders rework the claim and send the payer additional information regarding the claim. However, hard denials are final and can’t be reworked for reimbursement. As a result, practices write these off as lost revenue. Our article, “The Top 5 Reasons for Medical Billing Denials and How to Prevent Them,” can provide more details on the types of denials and what causes them.

Of all submitted claims, 15-20% gross charges are denied by payers¹. And, approximately 67% of all denied claims are appealable¹, but more than half (50-65%) are never worked due to lack of time or knowledge². If a facility decides to rework and resubmit the claim, the average cost is about $25³.

When it comes to denials, it’s important that you don’t leave money on the table. A well-structured denials remediation program can address current denied claims and prevent future denials. This will lead to a more robust bottom line.

Steps to an Effective Denials Remediation Program

1. Understand the causes of denials. A variety of reasons could trigger denials. The coding could be incorrect or have errors, such as an unsupported level selection or a missing modifier. On the other hand, payers may have issued new rules that dictate they will no longer cover a certain service. The service could have been included with another claim that has already been adjudicated, or it could be a duplicate claim. Our article, “Everything You Need to Know About Claims Denials: Causes, Prevention, ANSI Codes & More,” features more information.
   • Conduct coding quality audits to pinpoint problems. Quarterly coding audits can help identify the most common types of denials an organization receives and what’s causing them. During YES coding audits, we review the documentation to ensure support of the reported diagnosis and procedure codes, as well as the specific service being performed. Detailed spreadsheets provide recommended code changes for each coder/provider.
2. Implement a tailored education plan to mentor and train coders on the areas of improvement. Depending on the results of the audit analysis, practices should put in place a specific education program that targets the areas where coders need more education. Furthermore, YES educators can create custom learning paths that focus on the codes and terminology of a facility’s specialties to ensure coders learn the material they truly need.
3. Build standardized coding policies and guidelines. If one already isn’t in place, enact a coding handbook for the facility to provide standardized coding practices for the entire organization and policies on how to handle denials. This will ensure coding quality levels do not suffer and the number of denied claims decreases.
4. Keep applicable software and billing systems up to date. Confirm that the organization’s EHR system, software scrubber, and billing system are current and have completed any recent updates. This will ensure that the system will suggest proper edits and minimize the risk of incorrect coding.

Need Additional Help with Denials Remediation?

In conclusion, implementing an effective denials remediation program is hard work. It can be an enormous task for an already busy HIM department. That’s where a healthcare coding, auditing, and consulting firm, like YES, can step in.

Our team works on denials remediation for both professional fee and hospital clients. Currently, we can assist facilities with coding questions on the denial, interpreting the denial, and/or providing documentation/references to appeal the denial with the payer. Then, the provider sends this information to another department for billing/appeal purposes, so they can garner experience in amending the claim with the payers.

In addition, our results speak for themselves. Our denials remediation services have helped clients recover 96% of denied claims on average. The team at YES has worked $1.7 million monthly in front-end edits per client. In addition, we work $2.8 million monthly in denial rejections per client.

Contact our team today to learn more about our denials remediation services.

Sources:

1. EideBailly, 2020.
2. RevSpring, 2018.
3. Medical Group Management Association, 2014.