Advanced Revenue Cycle Analytics: An Overview

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Denial management is a never-ending process. Lowering your denial rate and then keeping it low requires clearly established workflows, quality technology, and staff members who are committed to the process. Below are some of the best practices that help healthcare organizations reduce denials and improve their revenue cycle outcomes.

4 Denial Management Best Practices

1. Identify

The first denial management best practice is to identify denials and the denial reasons as they come in. This sounds simple, yet we find that many denied claims slip through the cracks. In fact, over 50% of all denied claims never get reworked. Letting denials slip through without being flagged and reworked is essentially letting money go right down the drain.

To never miss a denied claim, the first thing you have to do is assign one or several revenue cycle staff to catch claim denials. Select someone who is detail oriented and diligent, and clearly outline that this is their responsibility. This job cannot be taken lightly or dismissed in the midst of all the other revenue cycle work that piles up.

When denied claims come back to the practice, they will be assigned a claims adjustment reason code, or CARC. This code will appear at the line item CPT code level. The designated denial management staff person will then need to decipher and interpret this denial reason code in order to discover why the denial happened.

Sometimes, this denial reason code can be vague. It may require further research on the part of your staff to figure out what information is missing or incorrect. In order to make some of this easier, we have put together a comprehensive list of denial code reasons. For your convenience, download this list.

2. Rework

After you have taken the time to identify the root cause of the denial, you must go the next step to rework it. As we mentioned earlier, over 50% of denied claims are never reworked. Don’t let revenue slip through the cracks in the form of denied claims.

As you are working through denials, you need to have a system in place. Whether it’s organized by dollar amount, insurer, or by date, staff members in charge of working denials should know their priorities and work through them as quickly as possible. The longer a denied claim sits in the back-burner, the less likely it is to ever get reworked and ultimately paid.

3. Prevent

This is the most crucial step in the process, because it saves you time and money downstream. Once you have identified denials and resubmitted those claims, you need to prevent those same denials from happening again. This is where a custom rules claim scrubbing engine can help. Once you know the reason your claim was denied, you can build a custom rule to ensure that type of error never happens again.

AccelaSMART software flags your coding team on claims with errors, so they can code on an exception-only basis. Not only is this the most efficient way for coders to operate, but it also ensures that updated coding knowledge is shared across the team. You no longer have to rely on your very best coder to catch all of the mistakes – every coder on your team will be able to catch and revise claims that would have been denied.

4. Analyze

The best way to catch denials before they even happen is to continually analyze your revenue cycle through Advanced Revenue Cycle Analytics. Using analytics, you can monitor the productivity and accuracy of your coding staff. Find out exactly what claims they are stopping to make changes on, and if there is an opportunity, you can build more custom rules. That way, no claim slips out the door with an error that will lead to a denial. Use these detailed analytics to continually reduce your denial rate and improve your coding accuracy.

For even more advice on how denial management, download our free guide. It’s full of best practices and tips to keep out denied claims and boost your bottom line.