Claim Denials Are Costing You Money. Here’s How to Fix it.
There are numerous ways healthcare providers can save money when it comes to partnering with a revenue cycle management company. Whether your practice wants to improve the onboarding process or increase the rate of collections, there are many ways to improve the patient experience, reduce errors, and increase income across the revenue cycle. Ask any revenue cycle management company where the most significant opportunity to save money is, and they all will point to one area—claim denials.
Claim denials are a commonly known problem in healthcare revenue cycle management, and yet healthcare providers are consistently losing money in this area. The average provider has a claims denial rate of between 5-10%, and of those claims, 65% are never worked and reprocessed for reimbursement. That’s a lot of money left on the table. What’s worse is that 90% of all claims are preventable in the first place.
If claim denials are so common, why don’t healthcare providers focus on avoiding them? Well, it’s a good idea, but receiving a denial is challenging for many practices in the first place. There are many obstacles that healthcare providers face when trying to fix these claims in-house. Appealing a claim can be a resource-intensive process, especially if a provider is using a manual process to submit the claim appeal. Many doctors don’t believe they will recoup enough of the costs of a denied claim to justify the administrative expense of resubmission.
Unfortunately, this belief is costing healthcare providers thousands of dollars every year. A robust claim denial management process can prevent many claims from ever being denied and will help recoup the cost of a denied claim. But does partnering with a revenue cycle management vendor save you more than just dealing with claims internally?
A revenue cycle management company will look at your entire claims process and identify any weak points in your operations. They don’t just look at each claim individually. They’re also concerned with patterns in your system that may indicate recurring problems. Without looking at the entire process, it can be difficult for your office staff to know where the gaps in their processes lie. An outside company can provide analysis and insights into recurring problems and prevent making the same mistakes over and over.
There may be recurring reasons claims are denied. Common causes include:
- patients not being preauthorized for services,
- a lack of information from the patient,
- duplicate claims entering the system,
- insufficient documentation,
- patients not being covered for the procedure,
- credentialing and contracting issues,
- and clerical errors or missing data.
Many office staff are too busy to identify the reasons for each denied claim – it simply takes too long. This is where a partner can come in – an outside company has the resources and technology to determine why a claim is rejected.
Revenue cycle management companies take a proactive approach to preventing claim denials. All it takes is one typo or missed data field for a claim to be rejected. A vendor will utilize automated technology to make sure all data entering the system is correct before a claim gets submitted. Automated technology helps reduce the amount of paperwork your office staff have to deal with and lets them focus on more value-added tasks that they often don’t have time to complete. Implementing automated processes to your practice has many benefits. Not only does it make manual tasks, such as entering patient information easier, but it can also increase efficiencies in the onboarding and verification process for your patients.
On average, every claim denial costs healthcare providers $25 to resubmit. Multiply that by thousands of denied claims every year, and you can see how costly a reactive approach to claim denials are to the practice’s bottom line. Partnering with a revenue cycle management company isn’t just for healthcare providers that are large or have complex billing needs. Health Revenue 360, LLC worked with one healthcare provider who was struggling with $15,000 worth of claim denials, the equivalent of a month and a half worth of revenue for their business. By streamlining the denials process, this provider reclaimed $3,200 in the first 30 days alone and regained revenue from denied claims, some of which were almost a year old. And to top off the great work done – Health Revenue 360, LLC was flexible in working with them. They were hired for only denial management services and worked within the client’s existing systems – saving them time and money.
Many providers are concerned about the cost of partnering with a revenue cycle management company and have concerns about paying for services they may not need. At Health Revenue 360, LLC, we provided a tailored service that focuses on reaching your individual revenue cycle goals and can work with existing systems to meet those needs. Whether your practice is struggling with lost revenue due to a lack of denial management or require end-to-end revenue cycle management, Health Revenue 360, LLC can partner with you to grow, streamline, or simplify your business and increase your revenue.