USA
Belgium
France
UK
Australia
India
Singapore
Table of Contents
1
Introduction
2
Key Facts About Denials:
3
Reasons for Denials
4
Best Practices to Reduce claim denials
5
Conclusion
Introduction
Introduction
Claim denials are a nightmare for both providers and payors. Even after investing significant time and money, most payors fail in ensuring accuracy in claims payments. With an increase in claim counts, claim denials are also increasing exponentially. According to recent studies, in 2019 alone, there were about 17% of claims denied and there are several reasons which led to this. Though most claim denials were because of services not being covered, duplicate claims, wrong info, or lack of medical necessity the other reasons include wrong.
“One in four denials originate in Registration and Eligibility. It’s time to take a close look at the dollars and time these denials represent and focus on denial prevention in this area.”
Key Facts About Denials:
Key Facts About Denials:
89% percent of providers and health systems have experienced an increase in claim denials over the past three years,and 51 percent noted the increase as “significant.”
Eighty-six percent of denials are potentially avoidable.
The success rate for claim denial appeals for hospitals dropped from a median of 56 percent to 45 percent for private payers over the past two years.
In a typical health system, as much as 3.3 percent of Net Patient Revenue, an average of $4.9 million per hospital, may be at risk due to denials.
Reasons for Denials
Reasons for Denials
The following are the most common factors contributing to medical claims denials:
Untimely filing: If a claim is not submitted to the insurer within the agreed time from the date of service, the claim will likely be denied.
Duplicate claims:
Multiple claims submitted by the provider for the same patient, diagnosis, and date of services.
Human Errors:Payer may not recognize old insurance cards and ID numbers submitted on an original claim. Entering information manually can also result in medical coding and billing mistakes.
Non-covered services:The services provided may not be a part of the covered benefits.
No Preauthorization:The provider has to get pre-authorization for selected services before the treatment begins.
Lack of information on the claim:The modifier is missing or modifiers are invalid for the procedure code.
20% of denials are due to issues with patient registration and eligibility for medical claim. Due to the pandemic, medical claims have risen by 11% across the USA. In 2020, there was a 23% increase in health insurance claim denials compared with 2016. This increased the denied claims cost to more than $200 billion for hospitals and payers.
Best Practices to Reduce claim denials
Best Practices to Reduce claim denials
Proper configuration
The majority of claims fail due to configurational errors in the auto adjudication tools. Hence, an SOP needs to be followed while configuring auto adjudication systems:
Peer to peer review: This ensures an error free configuration
by eliminating typos and other manual errors.
Timely Reviews: Configuration to be monitored regularly and
timely edits to be performed in order to ensure that the latest changes
reflect.
Testing and Analysis
Testing all configured lines before moving to production will reduce
the additional errors:
Impact Analysis: UAT needs to be performed on all areas that are impacted during the configuration. All failed records
need to be listed and their root cause ascertained.
Configuration Testing: Tests need to be performed after every
new configuration in pricing applications to ensure accurate reimbursements.
Timely Auditing
To improve payment accuracy and control denials, perform timely
audits on payment configuration in adjudication system against provider
contracts. Also, compare whether fee schedules are matching with the
state & CMS approved rates.
Contract Audits: Contract audits are to be performed annually
to ensure payment terms in adjudication systems are consistent with the
contract.
Fee schedule Audit: Timely review of fee schedules to comply
with the state and CMS rates.
Conclusion
Conclusion
Denial Management is a continuous process; all denials are to be tracked carefully which not only ensures an improved Payor – Provider relationship but also helps the payor to receive better ratings.
Contributor
Sai Kumar Avula
Senior Consultant
Hashmi Keesari
Senior Consultant
Srinath Avantsa
Business Analyst, Innova Solutions
About Innova Solutions
Innova Solutions is a leading global information technology services and consulting organization with 30,000+ employees and has been serving businesses across industries since 1998. A trusted partner to both mid-market and Fortune 500 clients globally, Innova Solutions has been instrumental in each of their unique digital transformation journeys. Our extensive industry-specific expertise and passion for innovation have helped clients envision, build, scale, and run their businesses more efficiently.
We have a proven track record of developing large and complex software and technology solutions for Fortune 500 clients across industries such as Retail, Healthcare & Lifesciences, Manufacturing, Financial Services, Telecom and more. We enable our customers to achieve a digital competitive advantage through flexible and global delivery models, agile methodologies, and battle-proven frameworks. Headquartered in Duluth, GA, and with several locations across North and South America, Europe and the Asia-Pacific regions, Innova Solutions specializes in 360-degree digital transformation and IT consulting services.
For more information, please reach us at – [email protected]
