5 Ways Your Healthcare Organization Can Reduce Payer Denials

If your healthcare organization experiences double-digit denial rates, you are not alone. In 2020, the average denial rate for hospitals was roughly 11% for initial claims. This means that you are spending a remarkable amount of your practice’s resources on appeals and collection efforts—and some of these denials will not be recoverable. Our physician and medical practice lawyers want to help.

While some payer-provider disputes require litigation, many are avoidable. In this article, we outline ways that you can improve your payment processes and reduce your healthcare payer denials.

What Causes Most Healthcare Payer Denials?

The data suggest that many denied claims are preventable. According to Change Healthcare’s 2020 Revenue Cycle Denials Index, the top six causes of payer denials are:

  • Registration and eligibility issues (26.6%)
  • Missing or invalid claim information (17.2%)
  • Authorization issues (11.6%)
  • Service is not covered (10.6%)
  • Missing medical documentation (9.2%)
  • Medical necessity issues (6.6%)

Late claim filings, medical coding errors, and provider eligibility issues also contribute to denied claims, although at lower rates.

5 Steps to Reducing Your Payer Denial Rate

The fastest ways to improve your healthcare organization’s payer denial rate is to audit your processes, identify gaps in your systems, and correct them. Depending on the size and complexity of your practice, this might require professional help. However, there are some relatively simple ways you can improve your revenue cycle.

1. Audit Your Claims and Pinpoint Your Procedural Weaknesses

We encourage healthcare organizations to take a data-driven approach to their claims process. Look for trends in your denials:

  • Are you using incorrect billing codes?
  • Is your team missing filing deadlines?
  • Are you making pre-authorization errors?
  • Are you exceeding benefit maximums?
  • Does one of your offices or departments have a higher-than-average denial rate?

Once you identify your organization’s biggest problems, you can start building solutions.

Depending on your circumstances, your solutions might involve additional training, hiring new specialists, and improving your software systems. For smaller practices, you might opt for intensive training for your existing staff. If your office is larger and you maintain a myriad of payer contracts, it might be wise to invest in sophisticated software that uses machine learning to identify issues and automate your workflows.

2. Stay Up to Date on Your Payer Requirements and Billing Codes

The terms and conditions of your payer contracts are continually evolving. Whether it’s during a contract renewal or due to a unilateral amendment clause, healthcare payers are always trying to shift the balance of power in their favor.  

Whenever you receive a notice in the mail from a healthcare payer, it’s essential that you review it as quickly as possible. You’ll also want to keep up on the latest regulatory and billing code developments. Every year, CMS, NCHS, and the AMA update their codes, adding some new ones and removing older ones. When you are using the most up-to-date information, you are more likely to have clean claims.

3. Get the Right Professionals on Your Team

Your payer contracts are increasingly complicated. Whether you’re trying to navigate performance-based contracts, credentialing requirements, or evolving provider networks, it requires extensive knowledge and expertise. That might mean hiring in-house staff or partnering with outside professionals.

For example, if you have payer-provider disputes that are tangled in red tape, the physician and medical practice lawyers at Bryant Legal Group may be able to help you negotiate or litigate a favorable resolution. We can also suggest other professionals and services that can streamline your revenue cycle and claims procedures.

4. Negotiate Solutions Into Your Payer Contracts

Improperly denied claims can create inefficiencies for healthcare payers too. If you’re continually resubmitting claims for approval (and getting the compensation you deserve), there’s a good chance that the payer is as eager to fix the issue as you are.

Sometimes, payers can help you identify solutions—and might even be willing to negotiate them into your contracts.

5. Resubmit Payment Claims and File Appeals

While not all denied claims are recoverable, many of them are. When a payer denies your claims, appeal this decision. As simple as this sounds, an estimated 50-65% of claims never get resubmitted.

If your in-house team can’t resolve your most complex payer disputes, turn to an experienced medical practice attorney at Bryant Legal Group. Our team assists practices and healthcare organizations resolve denied claims—both in and out of court. We’re already a trusted partner of some of Chicago’s and Illinois’ premier medical practices, and we would love to help you become more profitable and efficient.

RELATED: To Assert or Not to Assert Assignment in Out-of-Network Payer-Provider Disputes

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The content provided here is for informational purposes only and should not be construed as legal advice on any subject.

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