Denial Management: Don’t Perform Medical Billing Without It
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 medical billing process.
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.
Few billing departments appreciate the value a good Revenue Cycle Denial Management system can bring to a medical practice or facility. A robust Revenue Cycle Denial Management system provides methodical management data for the billing process; the data are then used to (a) increase and (b) accelerate cash flow.
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.
Although many practice management systems can properly track claim denial information, few systems have the rare combination of having been both properly implemented to track the data and properly understood to extract the data in a meaningful manner. Without both of these elements the denial management process cannot properly provide the feedback on denials that is required. Even when this information is present, often there is no mechanism for feeding the information back into the medical billing process to correct billing problems.
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.
With the analytical capabilities available, the medical billing department or medical billing company can identify systemic medical billing problems, create and test solutions to the problems and implement process changes that will increase collections AND drive down medical billing costs. One example of this is pursuit of Clean Claim Law violators with the denial data produced from the denial management system.
As previously mentioned, an effective denial management system is critical for your practice if you want to improve your medical billing and hasten your collections. Implementation of the proper system can easily increase collections by more than 10% and could even exceed a 20% increase in collections.
Copyright 2008 by Carl Mays II
Filed under: Outsourcing