The Top Strategies Healthcare Organizations Can Use to Reduce Denials

Healthcare providers across the country are experiencing a massive surge in denials and write-offs. This undercurrent of denials has been primarily driven by factors such as changing patient demographics, evolving payer standards, and increased compliance risk.

These denials and write-offs seriously impact the organization’s financial stability and can ultimately influence patient care. Healthcare providers may feel like there’s nothing they can do, but there are proactive steps they can take right now to change the trajectory of the organization for the better.

Root causes of increased denials

The healthcare industry operates within a complex regulatory framework.  As compliance risk continues to grow, providers must ensure adherence to the latest regulations. Failure to comply not only leads to denials but also exposes organizations to legal repercussions. It is imperative that healthcare organizations understand these landscape changes to effectively begin to combat denials and write-offs.

It’s also important to note that with an aging population and an increase in chronic conditions, providers are seeing more complex medical cases. Combine this with evolving payer standards and requirements for reimbursement, which require that organizations stay abreast of these changes and proactively adjust their billing and coding practices to align with evolving payer expectations, and the situation becomes more complex.

Despite the ever-changing landscape of the industry, there are six actionable steps healthcare organizations can take to reduce their likelihood of denials and write-offs:

• Enhanced registration and pre-authorization process

A proactive approach to preventing denials begins with a detailed registration process. It’s critical to implement comprehensive checks to ensure that all necessary documentation and approvals are in place before a patient receives services. This includes verifying insurance coverage, obtaining pre-authorizations for specific procedures, and confirming that the patient’s information is accurate. By addressing potential issues upfront, organizations can identify potential issues early in the process, such as coverage limitations or expired policies. Addressing these issues before submitting claims significantly reduces the likelihood of denials related to eligibility and pre-authorization requirements.

• Accurate and timely documentation

Precision in documentation and emphasizing accurate and detailed record-keeping throughout the patient care journey is also paramount in preventing denials. Redefining the importance for clinical documentation integrity within an organization can further optimize the middle revenue cycle, ensuring accurate and comprehensive documentation that supports appropriate reimbursement. Timely documentation is equally critical, as delays will lead to claim submission deadlines. Optimization of the electronic health record (EHR) systems and creating a single source of truth creates a simpler process for providers and coding staff to follow.

• Claim scrubbing and validation

Claim review and editing is the next step in denial prevention. By implementing robust claim editing processes, organizations can proactively identify and rectify errors or discrepancies in claims before submission. Comprehensive claims edits encompass a range of checks, including verification of patient information, coding accuracy, and adherence to payer specific billing requirements. By addressing issues before claims are sent to payers, organizations can prevent common denials related to coding inaccuracies, insufficient documentation, or other errors. Regular audits and continuous monitoring of claims data can further enhance the effectiveness of this strategy.

• Data analytics for denial trend analysis

Leveraging data is a powerful tool for identifying denial tends. By analyzing historical data, organizations can pinpoint recurring issues and root causes. By understanding the root causes of denials, organizations can implement targeted strategies to address specific issues. This may involve additional staff training, process improvements, or technology optimization. Continuous monitoring and adjustment based on data-driven insights create a proactive denial prevention approach that evolves with the ever-changing landscape of healthcare regulations.

• Comprehensive training and education for staff

Specializing denials staff, organizing denials around appeal approaches, and crafting impactful appeal arguments contribute to a standardized process for addressing denials efficiently. This requires investing in ongoing staff training and education to keep staff updated on the latest coding guidelines, regulatory changes, and payer requirements. A well-informed team is better equipped to submit accurate claims, reducing the likelihood of denials due to coding errors or non-compliance.

Moreover, there should be a prioritization on cross-functional training to foster collaboration between billing, coding, and clinical teams. Improved communication and understanding among these departments can significantly reduce errors in documentation and coding, ultimately preventing denials.

• Collaboration with payers

Establishing strong communication and collaboration with payers is essential for preventing denials. Regular dialogue with payers to understand their specific requirements and expectations is essential. Clear communication channels can help resolve potential issues before they escalate into denials. Organizations should set monthly or quarterly meetings with payor representatives to discuss denial trends, lay out opportunities to bulk process inventory, and identify pain points in payer contracts to help negotiate terms that address specific challenges.

Additionally, staying informed about payer policies and updates is crucial for compliance. Regularly reviewing and updating billing processes in alignment with payer guidelines ensures that claims are submitted accurately, minimizing the risk of denials due to non-compliance.

In the dynamic healthcare landscape, preventing denials is an ongoing challenge that requires a combination of proactive strategies and continuous improvement. By investing in comprehensive training, a proactive denial management approach, and collaborative relationships with payers, healthcare organizations can significantly reduce claim denials and contribute to a more robust healthcare revenue cycle.

If providers are open to adopting a proactive and comprehensive approach, these strategies can serve as a foundation for navigating the complexities of the contemporary healthcare environment to minimize denials and optimize revenue.

Photo: Elena Lukyanova, Getty Images

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