Healthcare is an extremely challenging industry to be in. For most other industries, the customers are the payers. They pay for whatever product or service they avail. In the healthcare industry though, the primary payers are insurance companies. This means every single test and diagnosis and service offered to the patient needs to be communicated to the payer, so they can be convinced and settle the bill quickly. Insurance companies have a long list of terms and conditions on how the claims need to be sent to them and they are quick to deny claims that don’t follow these regulations. Denial management services is a part of revenue cycle management and help handle such denied claims, to ensure the service providers get paid what’s due to them.
What are some of the basic tasks of a denial management service team?
Let’s say a service provider sends in 1000 claims a month for reimbursement. Out of these, 150 claims are denied by the payer. So, the denial rate is 15%.
Now comes the role of denial management services. The team starts by separating these denials into two – hard and soft. Hard denials are those that say a hard no. There is no way an appeal is going to make a difference and hence such claims may have to be written off.
Soft denials are those that come with a juggling space. You can correct what was wrong and appeal again. However, the trick is to first know what went wrong in the first submission.
So, the denial management service team now identifies the reason for the denial. While most denials come with reasons attached, sometimes, the reasons aren’t clear enough. So, the team identifies the root cause and sees if they can rectify the same. They send the claim back to the team where the problem occurred.
Once the problem is rectified, they file an appeal and send the claim back again to see if it gets through. While this seems like a pretty straightforward attempt, there are so many challenges involved here. Identifying the root cause and sorting them out both need the right kind of expertise. It is even more challenging that all these need to be done quickly because there would be newer denials on the pipeline to be addressed.
Denial management services don’t stop with this. The team’s long-term goal will be to bring down the rate of denials organically. This will be done by data analysis and extensive mining of past denial trends. So, denial management experts should know all about data mining and analysis to create a long-term impact.
Now, once root causes of common denials are identified, it is the duty of the denials management team to discuss the same with the management and help take preventive actions.
In short, denial management services include the following acts.
- Identifying denials
- Managing denials
- Monitoring appeals
- Closing denial cases quickly and effectively
- Creating strategies for long-term solutions
- Preventing the same denials from repeating in the future
Conclusion
Denial management services is a very important part of healthcare RCM. They help reduce the rate of denials, increase cash flow and revenues generated, and bring down the number of write-offs. Hiring an experienced and worthy denial management team makes all the difference.
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