I-Med Claims - Medical Billing Company
Clean claim ratio

A Guide To Clean Claim Ratio And Its Importance In A/R Management

Effective claims management is crucial for businesses to gauge their proficiency in handling risks and achieving desired outcomes. Timely payment plays a pivotal role in healthcare A/R management. Providers can ensure a robust healthcare revenue cycle by prioritizing the submission of clean claims to private and government insurers. Similarly, claims management holds immense significance for insurance companies, serving as the core of their operations. 

What Are Clean Claims?

Clean claims are error-free submissions, free from issues or incomplete documentation that can lead to claim rejections or denials. The first component of a clean claim is ensuring that all claim information is accurate and correct. The second component involves ensuring the claim contains all the necessary information without omissions. US hospitals achieve average clean claim rates ranging from 85% to 95%. Managing and tracking claims can be challenging, but it plays a vital role in the healthcare revenue cycle and account receivable management.

Here are the key criteria for a clean claim:

  • The claim is submitted by a healthcare provider who holds a valid license on the date of service.
  • Procedure codes are appropriately supported by diagnosis codes, eliminating doubts about medical necessity.
  • All codes used in the claim are up to date.
  • The patient’s insurance covers the services rendered, and coverage was effective on the service date.
  • All patient details are accurate and placed correctly in the respective fields on the claim form.
  • The payer is correctly identified, and the payer ID number and mailing address are accurate.
  • The user lodges the claim within the specific timeframe.
  • Any supplementary documents required by the insurer are included along with the claim.

Clean Claim Payment: Timelines and Process for Health Plans

Clean claim payment is a crucial aspect of the reimbursement process in healthcare. Timely payment of clean claims ensures smooth financial operations for healthcare providers. In this context, it is important to understand the timelines and processes involved in clean claim payment by health plans. Health plans have specific timelines and processes in place for clean claim payment. Here are the essential points to understand:

Payment Period:

The payment period for a health plan requires that a clean claim be paid within 45 days of its receipt, with the exclusion of any time periods extended due to claim defects.

Notification of Defects:

If a claim contains defects, the health plan must notify the healthcare provider within 30 days of receiving the claim, stating all known reasons preventing it from being considered a clean claim.

Payable Services:

When a health plan identifies certain services listed on a claim as payable, it is obligated to reimburse for those services rather than rejecting the entire claim due to defects in other services.

Correcting Defects:

Upon receiving a notice of defects, a healthcare provider has 45 days (and any additional permitted time by the health plan) to correct all known defects in the claim.

Payment for Clean Claims:

If a healthcare provider successfully addresses the claim defects and makes it a clean claim, the health plan is obligated to pay the provider within the 45-day timeframe, excluding any tolled time.

Adverse Claim Determination:

If a healthcare provider’s response does not resolve the claim defects, the health plan must notify the provider of an adverse claim determination, along with the reasons for the determination, within the 45-day timeframe.

Resubmission Guidelines:

It is important for a healthcare provider to wait until the 45-day timeframe has elapsed before resubmitting the same claim to the health plan.

Providers can facilitate smoother financial operations and revenue management by adhering to the guidelines and promptly addressing any claim defects.

Consequences of Late Payment for Clean Claims

When a clean claim is not paid within the specified 45-day timeframe, there are significant consequences for the responsible party. The clean claim shall accrue simple interest at 12% per annum in such cases. Additionally, the Department of Insurance and Financial Services (DIFS) Director can impose civil fines for violations. Each violation may result in a fine of up to $1,000.00, with the total aggregate fine not exceeding $10,000.00 for multiple violations.

Four Tips for Ensuring Clean Claims in Healthcare

In a high-pressure patient care environment, the importance of minimizing mistakes that can impact a practice’s finances cannot be overstated. Clean claims, in particular, play a vital role in this regard. By expediting reimbursement, they significantly contribute to minimizing back-end expenses associated with claim denials.

Prioritize Detailed Documentation

  • Documentation is the key to submitting clean claims.
  • Provide detailed records of every patient encounter for accurate claims.
  • The more information and detail you provide, the cleaner and more accurate the submitted claims will be.

Review Denied Claims Thoroughly

  • Always review denied claims to identify errors and discrepancies.
  • Errors are often easier to spot upon a second review.
  • Set parameters for specialists to review denied claims promptly and take necessary actions.

Know Your Payers Inside Out

  • Familiarize your team with each payer’s requirements, policies, and processes.
  • Each health insurance company has its quirks and differences.
  • Sending claims with these peculiarities in mind increases the chances of approval.

Embrace Technology for Efficiency

  • Don’t be afraid to leverage technology for clean claims management.
  • Provide proper training to team members to ensure comfort and proficiency.
  • Investing in employee training is often more beneficial than hiring new staff.

Significance of Clean Claims in Accounts Receivable (A/R) Management

Effective revenue cycle operations are crucial for your practice’s financial stability and growth. Poor management of the healthcare revenue cycle can lead to a decline in collection efficiency and an increase in AR days. Accounts receivable lie at the core of revenue cycle management, as it directly impacts the speed of payment and overall operational health.

One of the fundamental aspects is submitting clean claims. Clean claims are error-free and complete submissions that eliminate the need for additional information. They are crucial in efficient A/R management. Clean claims improve the chances of prompt payment, reduce claim rejections and denials, and contribute to a healthier revenue cycle. By prioritizing the submission of clean claims, you can enhance A/R management and pave the way for financial stability and growth within your practice.

Clean claims significantly impact healthcare organizations, especially in accounts receivable management. Here are a few points highlighting their influence on A/R management:

Minimized Denials: Clean claims significantly reduce the occurrence of claim denials. By submitting error-free claims, healthcare organizations can avoid the time and effort spent on resolving denials, allowing them to focus on optimizing their A/R management processes.

Accelerated Cash Flow: Timely and accurate clean claims, as a result, lead to faster payment processing. Consequently, this results in improved cash flow within the organization, enabling efficient accounts receivable (A/R) management. Additionally, it reduces the need for extended collections efforts.

Enhanced Financial Stability: Clean claims significantly contribute to the financial stability of healthcare organizations. By ensuring that claims are accurate and error-free, organizations can maintain a steady revenue stream. As a result, they are able to meet their financial obligations and effectively invest in essential resources for providing quality patient care.

Streamlined Operations: Clean claims streamline the A/R management process by reducing the need for extensive follow-up and resubmission of claims. This allows healthcare organizations to allocate resources more efficiently, focusing on delivering patient care rather than dealing with claim-related issues.

Improved Patient Care: By submitting clean claims, healthcare organizations can ensure that they receive fair and timely reimbursement for the services provided. Moreover, this directly supports the delivery of high-quality patient care, enabling organizations to allocate resources effectively and invest in staff training, advanced technologies, and infrastructure enhancements.

Strategies to Improve Your Clean Claim Ratio

Increasing the clean claim ratio is crucial for optimizing your A/R management and receiving timely payments from insurance payers. A clean claim refers to an insurance submission that results in accurate reimbursement without discrepancies or manual data entry. A high clean claim rate demonstrates top-quality data capture and attention to claim accuracy throughout the process. Submitting clean claims reduces processing time for insurers and accelerates payment receipt. While achieving a clean claim rate of 95% or higher can be challenging, there are various strategies to improve the accuracy and timeliness of payments.

Claim Scrubbing

To increase your clean claim rate and avoid claim rejections, partnering with a reliable A/R management service provider is essential. They should offer a claims scrubbing system as a checkpoint to identify and correct coding errors before submission, keeping up with payer regulatory requirements to prevent claim rejections. Collaborating with a medical billing partner can save costs and ensure accurate coding.

Medical Billing Partner

Working with an A/R management services vendor dedicated to improving the clean claim rate allows your staff to focus on patient care while ensuring claims are consistently monitored for discrepancies. They can take necessary steps to maintain a clean claim rate above 95% and provide education and training for your personnel on billing practices and software usage.

Leveraging Medical Billing Software

Advanced healthcare billing software can significantly contribute to a high clean claim rate. Such software offers billing analytics tools for prior authorizations and code error identification, ensuring compliance with regulatory requirements. Quality EHR software incorporates claim scrub features and updates, enabling users to take corrective measures before submitting claims to payers for reimbursement.

The Bottom Line 

Healthcare facilities face pressure to continuously improve their A/R management due to government requirements and economic conditions. Proper coding and billing processes today contribute to healthy operating margins in the future. High clean claims rates ensure accurate and timely payment and efficient A/R management. Even the most pristine and thoroughly documented claim often experiences lengthy processing times, leading to revenue loss for healthcare practices. That’s why many companies have opted to incorporate I-Med Claims into their claims processing system. We expedite insurance claim reimbursements, ensuring a seamless and uninterrupted revenue flow that positively impacts the financial performance of healthcare practices. 

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