Health ITImproving Denial Management: Most Common Issues That Cause Denials

When it comes to denial management, hospital claims managers face a whole host of challenges when dealing with medical insurance companies. Claim denials, however, are perhaps the most problematic, leading to loss of revenue for the hospital and increased costs when facing protracted recovery processes.

In many cases, denials can be avoided with better denial management systems, with robust and comprehensive plans also allowing claims managers to identify where processes can be streamlined to minimize denials in future. Improving denial management then, is a crucial aspect of the job, leading to more profitable hospitals that spend less time appealing denials which, of course, leads to significant cost savings.

Most Common Reasons for Denials

Claims denials may happen for many reasons, however, undeniably, the most common cause for a denial is that a patient’s insurance plan doesn’t offer the right level of cover. Insurance plans are often complex, and in many cases, registration and eligibility can only be ascertained through comprehensive checks before a patient is seen by medical staff.

Other issues that can also cause claim denials include:

* Lack of Information

Omitting even the smallest piece of information can lead to costly denials. Particularly true in the case of personal information such as date of birth, current address, or even patient demographic.

* Double Billing

Clerical errors, overlapping duties or medical services may lead to similar or equivalent bills being generated which will then cause a claim to be denied.

* Late Filing

Another extremely common cause of denials, untimely filing of a claim usually results in denial. Claims managers only have so many days to correctly file a claim with the insurance company.

* Service Issues

Service issues present a wide range of problems. These can include a patient’s coverage being terminated or a patient reaching the limit of their benefits.

* Network Issues

Certain plans or insurance companies require that medical staff or the institution itself are part of an approved network. Coverage will only be granted if this is the case.

* Authorization Issues

Certain insurers want official authorization or a referral from another physician before services can be performed. Failure to do this may lead to a claim being denied.

* Wrong Modifiers

Problems can result from submitting invalid modifier combinations. In many cases these can be avoided with proper staff training and the relevant resources required to double check modifier codes.

* Cash Payments

The incorrect allocation, recording, or distribution of cash payments often leads to claims denials. Ensuring a comprehensive policy designed to deal with these payments is crucial.

Improving Denial Management Systems

In many cases, improving denial management systems can be achieved through the minimization of human error. Automating many of the claims processes is the perfect way to do this, helping hospitals and other healthcare organizations reduce denial claims through intelligent technology that ensures systems are fast, efficient, and reliable.

Staff training, alongside easy access to all the information required to fill claims, are also extremely important, and improving these elements within any practice is likely to reduce claims denials and boost revenue. Finally, with robust and collaborative partnerships forming the foundation of your claims systems, departments can more easily communicate issues and find resolutions to misunderstandings that may also lead to denials.

Put simply, identifying the most common cause of denials in your practice should be the first step of a process that leads to the efficient and effective improvement of your existing systems. Each organization will face its own set of unique challenges, however, combining automated recovery solutions with proper training and team building will go a long way to minimizing future denials.