You love treating patients, but you can’t afford to work for free. Yet that’s exactly what happens each time a claim from your office gets denied. To reduce write-offs and keep your cash flow healthy, everyone on staff—from billing and reception to physicians—needs to be focused on filing clean claims the first time around. “Claims denials are a preventable cost to a practice,” says Donna Knapp, a health care consultant with MGMA Health Care Consulting Group.
According to MGMA, in better-performing practices, an average of 3.2% of claims get denied on first submission. If your percentage is higher, it’s time to put your revenue-cycle management process under the microscope.
Eligibility, including outdated demographic and insurance information, is the leading cause of claims denials. Practices must ensure that their front desk obtains authorizations and verifies eligibility for every patient, every time. To reduce manual errors, you can automate the process through the clearinghouse that you use to submit electronic claims.
Watch, too, for patterns of rejection, says Reed Tinsley, a Houston-based certified public accountant and practice management consultant. Billing staff should communicate registration errors with the front-office staff and review the explanation of benefits for all denied claims. “You have to stay on top of your revenue-cycle process so you don’t repeat the same mistake,” says Tinsley. Most practice management software can be programmed to create monthly rejection reports.
Knapp adds that practices should create an editing process for batch and daily charge posting so that missing or invalid information is caught before the posting is complete. The process should screen to ensure that all required demographic information is included, ordering and rendering physician information is captured, revenue diagnostic codes are accurate for the CPT codes charged, and any modifiers applied are appropriate.
When claims are denied, which will happen, it’s equally important to resubmit a corrected claim or appeal right away, which improves your odds of getting paid. To do that, says Tinsley, make a chart of each payer’s deadlines so you don’t miss the window and “leave money on the table.”
By following a checklist for processing claims and taking action when payers deny them, you can considerably minimize write-offs. “Most claims issues are tied to sloppiness or a lack of knowledge of what can be billed or how to bill for it,” says Tinsley. “If the process is smooth, you’re not going to have those problems.”