Are Medical Billing Denials Killing Your Practice?

December 1st, 2008

by Carl Mays II

It has been accurately stated that you cannot manage what you do not measure. This is particularly true in the arena of medical billing denials. Without a strong Revenue Cycle Denial Management system in place you cannot properly manage this critical element of medical billing. If you are not managing your denials then you are most likely leaving more than 20% of your revenues uncollected.

There is a lot of confusion about the definition of denial management. If you ask five medical billing experts what this means you will probably receive six answers.

A good start to finding out if your practice is suffering from improper denial management is to find out from your medical billing service (or in-house medical billing manager) how they manage denials and how they measure success in this area.

A good denial management system is not simply about working denials, it is about systematically gathering the data required to eliminate denials. Working denials is like pumping water from your basement when a pipe bursts. Denial management is about fixing the pipe so you no longer need to pump water from the basement.

Achieving powerful results from denial management requires data, data and more data. Your denial management system must report and measure all claims that are being denied by your payers. With this level of data your medical billing specialists can fix the issues that are leading to the denials (whether it be issues with the claims or issues with the payers) and stop the torrent of unpaid claims into your medical billing process. Once you do this, then revenues for your practice will increase; probably by 10 to 20 percent.

What is typically missing from troubled billing operations is the lack of the management-reporting expertise needed to extract the data in a concise and meaningful way coupled with a lack of methodical, measured billing process needed to correct mistakes. A comprehensive Revenue Cycle Denial Management system has two main purposes. The first purpose is to provide feedback on why claims are denying and how many claims are not being paid on the first submission to the respective payers. The second is to fix these issues. Effective Revenue Cycle Denial Management software databases must be designed to track, quantify, and report on all denials for all payers.

A proper medical billing denial management system tracks every claim that has denied and can report this by payer, by CPT, by physician and by diagnosis. This information must be presented in a manner that allows fast identification of trends. With this powerful combination in hand, the medical billing department of medical billing service can then utilizes claim rules and edits that are specific enough to dramatically drive up the first pass claim acceptance and stop the flood of denied claims.

Payers that are chronic violators are pursued to resolve how and when they intend to process and pay outstanding claims. If the issues persist, there may be grounds to charge penalties stipulated by the Clean Claim Law. Only by quantifying and analyzing the problem can a medical billing team discover how to improve on the process.

A real Revenue Cycle Denial Management system gives you a way to optimize and accelerate cash flow. It also prevents your practice from falling victim to the games that insurance companies play with your reimbursements. An established and proven denial management system will improve your revenues between 5 and 20 percent.

About the Author:

Carl Mays is Co-Founder of ClaimCare Medical Billing Services, a medical billing company with clients throughout the United States. Carl has been assisting clients with Medical Billing problems and practice management solutions for more than 10 years. You can learn more about world-class medical billing processes by reading additional medical billing articles by Carl.

Tags: advice, Ask an expert, Business, Business and finance, Business services, Business to business, consulting, entrepreneurship, how to, Medical billing, Medical billing services, Medical services, Outsourcing, Small Business
Posted in Business | Comments (0)

You must be logged in to post a comment.

Free Articles Directory

Are Medical Billing Denials Killing Your Practice?

Leave a Reply

Categories

Archives

Link Eexchange

Meta

RSS

Recent Posts