Healthcare organizations are experiencing significant financial pressure due to rising costs, wage inflation, and pandemic-related uncertainty. Claim denials have become an important issue, resulting in an annual loss of up to $5 million for hospitals. Reduce claim denials is critical to maintaining the financial stability of healthcare organizations. Proper eligibility verification techniques can reduce the cost of reworking or appealing them, averaging $25 per claim for practices and $181 for hospitals.
Read on to learn how to reduce claim denials by implementing effective eligibility verification techniques and how much this benefits your bottom line.
Why Reducing Denied Claims Is Important
Hospitals have seen a 20 percent increase in denial rates over the past five years, with average claims denial rates exceeding 10 percent. Reducing denied claims is crucial for physicians and practices because it affects their ability to cover expenses and payroll. When an insurance company denies a claim, the practice doesn’t get paid, or the patient must pay out-of-pocket. This results in delayed payments, negatively impacting cash flow.
Claims must be filed accurately to receive prompt compensation and avoid these issues. Healthcare organizations can reduce claim denials to receive prompt compensation by verifying patient information, eligibility, and benefits.
Importance of Verifying Patient Insurance Eligibility
Effective eligibility verification is one of the critical techniques that can help reduce claim denials in healthcare practices. Healthcare providers can prevent common errors that often result in claim denials by ensuring that patient information is accurate and up-to-date. Prior authorization is a primary reason for medical billing denials. Failure to collect complete demographic details can lead to denial claims. Understaffed medical practices can use software tools to automate patient information management. Automated tools manage critical information about deductibles, coverage, contractual fees, and co-payments. Automating patient information management reduces the risk of manual filing and clears up the administrative staff’s schedule.
When patients arrive at a medical practice, verifying their insurance eligibility is crucial before any diagnosis or treatment. Failure to collect complete demographic information on the front end can lead to billing errors and denied claims. Medical practices can use software tools to automate patient information management to reduce this risk. These tools help manage critical information about insurance policies and fees, reducing the need for manual filing and billing.
Eligibility Verification Techniques To Reduce Claim Denials
Following are the techniques that help in reducing claim denials and maximize reimbursement:
Educating Staff
One of the key eligibility verification techniques to reduce claim denials is to educate staff on the importance of entering accurate information. Accurate data entry is critical to ensure that claims are processed correctly and paid promptly. Even small errors in data entry can lead to claim denials, resulting in lost revenue and dissatisfied patients. Denied claims affect everyone’s paycheck. Front desk personnel must understand the claims process. Incorrect information leads to denied claims. Denied claims lead to disgruntled patients and more work. Educate all staff about the revenue cycle to reduce denied claims. Staff members should receive regular training to stay updated on the latest insurance policies and coding procedure changes. This will help them to efficiently identify and resolve any eligibility issues, preventing claim denials.
Staying Informed
Staying informed about changes in insurance policies and billing regulations is crucial to reduce claim denials in healthcare practices. Insurance policies and billing regulations are continuously evolving, and it’s important to stay updated on the latest changes to ensure your practice is compliant. Attending conferences or training sessions can also provide valuable information on new billing regulations or updates to existing ones. This can help identify potential issues or areas where staff may need additional training to avoid errors and reduce denied claims.
Specific Coding
Accurate coding to the highest level of specificity can significantly reduce the risk of denied claims. When coding procedures and diagnosis data, it is important to use the most current version of CPT, HCPCS, and ICD-10 codes. Using an outdated codebook or entering the wrong code can result in claim denials. This can also lead to potential fraudulent representations to receive payment for healthcare services, including upcoding and unbundling. Healthcare practices should develop staff protocols that prioritize accurate coding and reduce the potential for errors to minimize liability risk and maintain compliance.
Getting to Know Your Payers
According to research conducted by the Medical Group Management Association (MGMA), nearly 70% of claim denials are preventable, and most of these are related to eligibility and coverage issues. Healthcare practices can improve their overall revenue cycle management by taking the time to get to know their payers and their rules. Most healthcare providers accept between 15 and 20 insurance plans, and understanding payer requirements can expedite payment and minimize denials.
It is also essential to monitor payers’ websites and correspondence regularly. Establishing relationships with primary payers is another effective way to get answers and resolve issues faster. By developing positive relationships with payers, healthcare practices can facilitate smoother communication and quicker resolution of any problems that may arise.
Leveraging Technology
Using technology can be an effective eligibility verification technique to automate many of the processes involved in claims processing. It can help ensure that claims are accurate and complete before submission. The study found that practices using technology to submit claims had an average denial rate of 4.77%, compared to an average denial rate of 6.96% for practices using manual processes.
One way to leverage technology is to use practice management systems or EMRs with built-in alerts to ensure that all necessary data is collected at every encounter. These alerts can help staff identify missing information and take the steps required to collect it, reducing the risk of denied claims.
Another way to use technology is to use software that reviews claims before submission and flags any missing information or inconsistencies with set standards. This process, known as claim scrubbing, can help ensure that claims are accurate and complete before submission, reducing the likelihood of denials.
Consistently Confirm Patient Information
Consistently confirming patient information is an effective eligibility verification technique to reduce the likelihood of errors and subsequent claim denials. Patients often change their addresses and insurance information, and healthcare providers must verify this information at every visit to avoid claim denials. It is essential to establish protocols to confirm patient information at every visit. This can be done through automated reminders in the electronic health record (EHR) system or staff training on verifying patient information.
Prioritize Eligibility Verification
One of the major reasons for claim denials is inaccurate eligibility verification. According to a 2020 Medical Group Management Association (MGMA) poll, 42% of providers identified inaccurate or incomplete prior authorizations as a top cause of denials. Prioritizing eligibility verification before providing care to patients is important to avoid these denials.
While most providers use medical claims clearinghouses or have systems to check eligibility beforehand, verifying patient identities at every touchpoint in the healthcare journey is crucial to avoid mistakes. Additionally, if the patient requires additional treatment not covered in the initial authorization, it can result in a mismatch and denial. These solutions ensure cleaner claims and give patients better insights into their debts.
Effective Claims Follow-Up Techniques
Implementing proper claims follow-up protocols is critical in protecting your practice’s cash flow. Despite the importance of follow-up, many medical practices prioritize claims submission and delay much-needed follow-up. It’s best to have a separate team working on outstanding accounts receivable claims every month until they’re processed correctly. Claim specialists should start follow-up when a claim is 30-45 days old and regularly check payer portals for claim status. If a claim is unprocessed or inaccurately denied, they should call insurance companies to send it back for proper processing. They should also keep careful notes about each claim in the billing software system. With excellent claims follow-up protocols, your practice can ensure that valuable revenue is not lost due to claim denials.
Outsource Your Billing with I-Med Claims to Reduce Claim Denials and Streamline Your Processes
As a healthcare provider, your primary focus is on patient care. However, managing the complexities of medical billing and claims can take up valuable time and resources. That’s where I-Med Claims come in. Our experienced team can handle your billing and claims, reducing denials and improving your financial health.
Here’s how I-Med Claims can help:
- We ensure that all patient information is accurate and up-to-date to reduce claim denials due to inaccurate patient data.
- Our tools verify eligibility and benefits, reducing the chance of denials due to inaccurate or incomplete prior authorizations.
- We submit your claims as quickly as possible, meeting timely filing deadlines to ensure that your claims are paid promptly.
- Our team follows up on all your outstanding claims each month, eliminating the need for your staff to spend time on claims management.
- We meet with you regularly to analyze your claims data and identify areas for improvement to help you streamline your billing and claims processes.
Contact us today to learn how I-Med Claims can help your practice reduce claim denials and improve your financial health.
