Medical billing denial is the rejection of a claim by an insurance company made by an individual or by the 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 claims proves to be a continuous headache as it affects the credibility, cash flow, and the overall efficiency of a healthcare provider.
Studies suggest that the annual claim denials for hospitals stand at 2 percent, whereas, for medical practices, the percentage increases up to 10 percent. It makes medical practices less profitable by comparison.
Some of the healthcare organizations even undergo denial rates of 15 to 20 percent, which is considered extremely high. It 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 simple precautionary measures. They might not vanish completely, but the steps below assist in minimizing them. The underlying fact is that reducing them even by 1% has a massive impact on lowering provider’s accounts receivable.
Let’s go through the measures we need to take to 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 task force 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 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 rectifies any errors before claiming the medical bill. The automated predictive analytics help quickly identifies 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.
The best way to reduce your accounts receivable is to identify the reasons leading to medical billing claim denials. Medical billing and coding play a vital role in the acceptance or rejection of claims. Staying alert and always on the lookout for billing mistakes, removing them, and taking measures so that they don’t happen in the future increases a provider’s credibility.
P3 comes up with medical billing services for clinicians across various specialties. It is not always the technical skills that matter but the will to complete a certain task. We have the passion to deliver results on behalf of doctors when it comes to billing or the Quality Payment Program.