Medical Billing Cannot Succeed Without Tough Denial Management
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.
Some medical billers believe denial management is the same as follow-up, others believe denial management is primarily geared towards dealing with issues around medical necessity. Many medical billing experts simply think as denial management as a description for the overall billing process.
A good start to finding out if your practice is suffering from improper denial management is to find out from your billing service (or in-house billing manager) how they manage denials and how they measure success in this area.
It is amazing how few medical billers or medical billing companies understand how proper denial management will dramatically increase the revenue of a practice. They understand the value of working denials, but this is not the only secret to good denial management. Working denials is like bailing water from a leaking ship – it can help keep the ship afloat, but ultimately you really need to fix the leak.
Fixing core denial problems and increasing collections requires keeping track of, understanding the magnitude of, and reporting on every claim that is denied by a payer. Tracking all denial across all payers is critical. The proper denial management system provides the data required to stop the root cause of problems and significantly increase the rate of first claim submission acceptance. If your practice is not measuring this level of detail then money, significant money, is being lost in the flood of denied claims pouring into your practice.
Three elements are typically missing from a practice or billing company’s denial management process: data, filtering/sorting methodologies and feedback to systematically correct errors. Most practice management systems do not properly track denials – at least not in the form in which they are typically used (i.e., they may have the capability, but only if properly implemented and used). Those PMs that do track denials typically overwhelm the practice with data that is difficult to utilize for high level denial management. Finally, even if the data is captured and can be properly utilized, most billing groups do not have a systematic way to get the information back into the billing process in a manner that prevents the denials from occurring again in the future.
Your denial management system must 1) Track all denials by payer; 2) Report on the reason for the denials and the number of claims denied for each reason; and 3) Allow for in depth analysis and comparison across payers to identify important trends. Once these capabilities are in place, the medical billing specialists can create targeted process changes and claim edits/rules that will fix systemic billing issues and increase collections.
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.
If you implement a powerful denial management system you can optimize your medical billing and speed up your cash flow. As previously mentioned, a strong denial management system can increase your collections by 20 percent or more.






