How to handle denied claims

                  Knowing how to best handle a denied claim is essential for correcting a situation and figuring out how to obtain the payment anyway. Unfortunately, denials management is a neglected area of the industry. Most people avoid it because it requires such specialized knowledge of the procedures as well as some intensive labor of talking to different people and filling out numerous forms. Below are some tips in regards to avoiding denials.

  • Recognize that revenue cycle begins in the front office.

Providing services to patients whose insurance has changed, lapsed, or expired will result in a denial— even if it’s coded correctly. Make it a point to check every patient’s insurance every time, including copays and deductibles. Front-end verification can forestall back-office headaches.

  • Look beyond first-pass clean claim rate.

You’d be better off focusing on metrics that matter, such as denial rate, collections as a percentage of revenue, or days in A/R.

  • Learn from your mistakes.

The common reasons from various collaborative sources include a lack of medical necessity, a mismatch of diagnosis and treatment codes, up-coding or unbundling, incorrect coding, and missing/wrong modifiers.

  • Examine your workflows.

If you are performing claims scrubbing after the claim is generated, that’s too late. Consider a workflow to perform a check on edits associated with coding at the same time as charge capture occurs.

  • Edit claims early in the process.

Develop the mindset that everyone who touches a patient record should understand the implications of coding. A clinician, for example, who sees charting as an onerous task may make inadvertent mistakes that result in a denied claim. But expecting your experienced coders to fix these costly mistakes takes precious time that would be better spent on more complex tasks. Therefore, edit early, edit often, and don’t leave mundane coding and claims tasks to your most experienced billers.

  • Examine your claims technology.

Claims scrubbing software is a must to reduce denials. Many electronic medical records and practice management systems have generic claims-scrubbing software that checks for obvious mismatches, such as age related discrepancies. But those systems will do nothing to help your billing department move the needle on denials.

  • Train for better performance.

Not everyone on your staff or in your billing organization needs to understand coding and claims at a granular level. However, everyone should understand the role they play in the revenue cycle process. Don’t simply demand that front office staff check insurance every time.