Medical billing denial is the rejection of a claim by an insurance company made by any individual or by their provider, to pay for the rendered health care services. If you are a financial administrator in a hospital or any other healthcare facility, you would have an idea about the complications involved in medical billing claims. The denial of such claims proves to be a continuous headache as they affect the credibility, cash flow, and overall efficiency of a healthcare provider.
Studies suggest that the annual medical billing claims denials for hospitals stand at 2 percent, whereas, for medical practices, the percentage increases up to 10 percent. This makes the medical practices less profitable by comparison.
Some of the healthcare organizations even undergo a denial rate of 15 to 20 percent, which is considered extremely high. This means that providers facing this kind of denial rate have one out of five medical billing claims denied.
In addition, the providers have to spend a net amount of $25 for every denied medical billing claim.
However, you can avoid most of your medical billing denials by taking some simple precautionary measures. They might not vanish completely, but these steps will assist in reducing them to a minimum. The underlying fact is that reducing them even by 1% can have a massive impact on lowering the provider’s receivable claims.
The best way to reduce your receivable claims is to identify those reasons leading to medical billing claim denials. Staying alert and always on the lookout for any medical billing mistakes, removing them, and taking measures so that they don’t happen in the future can really increase a provider’s credibility.
Here are few measures through which you can effectively reduce medical billing claim denials.
- Categorizing and Quantifying Medical Billing Denials
Providers can reduce receivable claims by properly analyzing, calculating and reporting patterns of different healthcare providers, departments and payers. These analytical measures are essential to run an efficient medical billing management system.
- Create a Professional Taskforce
Put together a taskforce to analyze and rectify medical billing trends. It is also important to find out which trends are worth looking into and which are not. Well educated and trained team of professionals can quickly streamline the medical billing process for the provider.
- Organized Data Portals
Organized patient data portals handle information in a more structured manner. Make sure to design a smooth registration process. Otherwise, it may lead to errors resulting in medical billing denials.
- Find Out Reasons behind Denials
You need to find the root cause of a denial. For this purpose, you have to go beyond any coding clarifications and design different analytical techniques.
- Use Updated Claim Management Software
It is important to ensure that all the edits made are functional, recent and contribute to a continuous improvement cycle. This improves the overall claim recovery rate. Pick up a vendor that can provide you with better claim recovery rates.
- Automated Predictive Analytics
It is crucial to flag potential medical billing denials and rectify any errors before claiming the medical bill. The automated predictive analytics help quickly identify incomplete medical billing claims.
- Work Alongside Payers
Providers need to work with payers to eliminate the specific contract requirement which may lead to medical billing denial. Data analytics can help determine the trouble spots and falsely navigated support systems.