Denial Management Success: 5 Power Moves for a Strong Revenue Cycle

May 2

On the surface, claim denials may seem simple to resolve. Correct the spelling of a patient’s name. Assign the right medical code. Obtain an updated insurance identification number. Make the fix. Resubmit the claim. Done. However, to truly move the needle on denial management, medical practices able to identify big picture denial trends, drill down into the root causes of denials, leverage the right technology, and create a team-based approach to denial management. Here are five key denial management strategies for a strong revenue cycle.

What is the process of denial management?
Denial management is the process of resolving denied medical claims, and it’s a critical part of a healthy revenue cycle. Effective denial management not only improves cashflow; it also promotes operational efficiency and reduces revenue leakage.

The process of denial management starts with identifying denials when they occur. Payers notify providers of a denial via an Explanation of Benefits (EOB) or Electronic Remittance Advice (ERA). From here, it’s the provider’s responsibility to either fix the error and resubmit the claim or appeal the denial when it’s disputable. In some cases, providers may also need to include medical records or supporting documents to ensure payment.

Denials occur for a variety of reasons, and the good news is that payers usually give providers a clue via the denial reason code on the EOB or ERA. Following are several common reasons for claim denials:

Authorization problems (lack of prior authorization or referral)
Coverage issues (e.g., services not covered or patient not eligible)
Medical necessity (service deemed not medically necessary)
Technical errors (e.g., missing information, coding errors, or duplicate claims)
Timely filing (claims submitted after the payer’s deadline)

While responding to denials retrospectively is important, it’s equally critical to promote prospective denial management, meaning to implement workflows and safeguards that aim to prevent denials in the first place.

Key denial management power moves
A strong proactive denial management strategy includes the following power moves designed to take control of denials and promote effective revenue cycle management:

Power Move 1: Strengthen front-end processes. Invest in front-end staff education and empower staff with technology to simplify patient scheduling, automate eligibility checks, and leverage patient engagement tools to reduce errors.

Power Move 2: Optimize medical coding and documentation. Educate medical coders about new, revised, and deleted codes as well as evolving coding rules and compliance regulations. Also leverage claim scrubbers to identify and correct coding errors prior to claim submission.

Power Move 3: Establish a cross-functional denial management team. Be sure to include physicians, medical assistants, medical coders, and revenue cycle management staff. Why? Claim denials sometimes culminate after a domino effect of several errors or omissions involving multiple individuals. Having multiple perspectives on the issue can be helpful, and it’s important to ensure everyone understands their role in proactive denial management. Denial management isn’t one individual’s responsibility. It’s the collective responsibility of everyone within the medical practice.

For example, physicians must understand that their clinical documentation is what drives the medical codes that coders assign. Payers use these codes, in turn, to determine medical necessity. Ideally, this cross-functional denial management team can handle high-dollar and high-volume denials within 24 to 48 hours. This ‘rapid response’ approach to denial management can help prioritize denials with the biggest revenue impact and reduce aging accounts receivable.

Power Move 4: Implement real-time denial tracking. As soon as a denial occurs, medical practices can begin to work on it either by correcting the error(s) or by drafting an appeal letter. Real-time denial tracking also provides important insights practices can use to drive process improvement immediately. For example, if a medical practice starts to see a trend in a payer denying a certain medical code, staff can reach out to the payer to obtain a copy of its policy regarding this code and revise the practice’s medical coding processes accordingly to prevent additional denials.

Power Move 5: Don’t shy away from appeals. When there’s a strong suspicion that a payer denied a claim inappropriately, it’s often worthwhile to appeal the denial. To save time, consider building a library of payer-specific, pre-approved appeal letter templates that auto-populate with denial data. Then track appeals to ensure payers process and resolve them.

Next steps for optimizing the revenue cycle
A proactive denial management plan helps today’s medical practices maintain adequate cashflow, and it lays a foundation for financial sustainability. However, it’s important to leverage the right people, processes, and technology. Learn how edgeMED can help level up your denial management strategy.