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Here’s a jaw-dropping statistic about denied claims:

Over 50% of denied claims are never resubmitted.

Surprised by this number? If it seems far-fetched, you may want to take a closer look at your denial numbers. The fact is that denied claims are easy to forget about. As the revenue cycle workload increases, there’s plenty of work to distract you from following up on denied claims. After all, the hope is that claims do not get denied in the first place.

Think for a moment about how much revenue is slipping through the cracks. The industry average denial rate is 5-10%. Let’s say a practice has 30 doctors who each see 20 patients per day at around $150 per encounter. They have a healthy denial rate of 4%, but like most practices, they neglect to resubmit half of those denied claims. That means they are losing $657,000 a year on denied claims that they neglected to resubmit. That is a huge financial impact on that practice!

Steps to Prevent Denied Claims:

1. Be diligent about the process

The first step to preventing denied claims is to make it a priority. Most revenue cycle teams want to start strong with correct coding, but where they fall short is ending strong. While it is tempting to move on to the next revenue cycle task, someone needs to own the process of resubmitting every single denied claim, as well as tracking down the source of the denied claims. It takes diligence and persistence, but the impact to your practice will be long-lasting.

2. Use coding rules to submit clean and complete claims

The next step is to put an efficient and accurate claim submission process that will help you make sure every claim you submit is clean and complete on the front end. The best way to do this is to invest in a rules-engine that will vet every encounter against government and payer rules. These standards vary from payer to payer, and they are constantly changing; that is why we update AccelaSMART regularly to provide the most accurate coding rules. You can also build custom rules based on the needs of your practice. These are the steps that when put in place will help you keep that denial rate as low as possible.

3. Track down the source of every denied claim to prevent future denials

Even with a really good denial rate, there will be some claims that are rejected. When that happens, someone on your revenue cycle staff team should be dedicated to finding out the source of each one. If a claim gets denied once, it will get denied again unless something in your process changes. Finding out why a claim got denied will help you build better rules in AccelaSMART, or discover a retraining opportunity for one of your coders. These improvements will prevent future denials and increase cash flow for your practice.

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