A typical Medical Practice can easily lose 7%-10% of its revenue to denied claims that could successfully be amended and resubmitted. Add to that the difficulty, at times the impossibility, of collecting directly from patients, and you’d be able to comprehend the extent of revenue you are losing despite enhanced workload.

Patient collections might be a hard nut to crack. Thus, your immediate focus should be to ensure that denials are kept at a minimum. One often-quoted best-practice recommendation is to hold denials to 4% or less. Difficult but doable.

Advisory Company, a hospital research organization, suggests that approximately 90% denials can be prevented. Making sure that you are on top of minimizing your denials, also makes financial sense. Not only do you lose money if a denial is not reversed, but you also end up spending a considerable amount of money reworking denied claims.

MGMA report estimates this cost to be around $25 per claim. Thus, if your staff reworks 100 claims every month, it’s costing you $2,500/month (That’s more than what outsourcing your billing will cost!)

Thus, it is worth your time to revisit your practice workflow to identify and rectify problem areas.

Where is the problem?

If a practice is losing revenue because of denied claims, then it is time to investigate the reasons for the denials, and come up with solutions to prevent it. Certain issues may differ depending on the practice, but most of them are standard problems found across the board. Your EHR should enable you to pull out reports on denied claims; you should review and analyze them at least once a month. Claims can be denied due to:

• Incomplete patient information
• Incorrect patient demographic information
• Incorrect charge codes that do not cover patient’s insurance plan
• Duplication of claims submitted
• Termination of insurance plan before physician provides the service
• Incorrect provider name, or no name at all
• Patient benefit limit utilized
• Change in patient’s insurance plan in the middle of a medical treatment
• Failure to attach primary EOB with secondary claim
• Prior authorization number (PAN) not included in the charge

CureMD Denials Performance Indicators

How to fix it?

After identifying the problem, address the issues with the relevant staff in your practice. Some important points of intervention are:

Front-desk staff: The first point of interaction between the practice and patient is, the front desk. A lot of important billing functions rely on your front desk doing their jobs correctly. They include:

• Validating insurance for each and every visit
• Collecting copays
• Getting correct addresses, phone numbers, email addresses, etc.

Many practices make the mistake of not investing enough time in training their front-desk staff. Frankly, this is a big mistake as your front desk will be interacting the most with your patients. Thus, make sure that they are well versed in your practice’s financial policy, and adept at collecting and verifying patient information.

A best practice is to deploy technology to assist your front desk rather than expecting them to wear multiple hats. Electronic Health Record (EHR) should help with:

• Eligibility Verification: Some EHRs have the capability to verify insurance eligibility in less than 3 seconds. The system provides you the most up to date information on copays, deductibles, plan coverage and limitations. Your staff can save precious time by not having to call the insurance provider or the payer.
• OCR Scanning Capability: Rather than manually typing information, you can integrate an OCR scanner with your EHR to populate demographic and insurance information, and simply scanning the front and back of your patient’s driving license and insurance card. This process has a 99% accuracy rate and reduces documentation considerably.

Medical staff: To avoid coding errors, physicians should ensure that they convey the accurate procedure and diagnoses codes to their billing staff. Correct coding and use of modifiers is the physician’s responsibility. Hold a coding seminar to help educate them.

If the problem lies not in the coding itself but in communicating it correctly to the staff, you can utilize technology to assist you. If you have an EHR, try to create an interface with your practice management solution so that this information is electronically transmitted to the biller.

A best practice in this regard is to buy an integrated EHR and Practice Management solution rather than two standalone systems. Integrated solutions ensure that the correct CPT and ICD codes are automatically transferred in real time to the billing department, thereby reducing the chances of error.

Office policy: Every practice should have a comprehensive policy for payment collections. The policy should include provisions in case an insurance plan is changed in the middle of the treatment, terminated before the patient’s visit or reaches its maximum benefit limit. Moreover, patients must be informed beforehand about their responsibility to avoid misunderstandings in the future.

Billing staff: The Billing department sends out claims to insurance providers after scrubbing them. Thus, if a claim is denied because of missing or incorrect information, such as failure to attach primary EOB with secondary claim, incorrect provider name or not including PAN with the claim, you need to address these issues with the billing staff.

A good EHR automatically withholds the submission of these claims by placing them in the “Incomplete claim Bucket.” All your biller needs to do is to open the incomplete claim and fix the errors that the system has detected. With a good EHR system there nothing should stop you from reducing denials.

What if I do not understand a rejection reason?

80% of the time many practices fail to understand the rejection reasons provided by the insurance company. This can delay resubmission of denied claims or prevent a practice from correcting these mistakes beforehand.

A proficient biller will be able to identify these problems in time. However, this is where a good EHR/PM can help you save time. It has a “rejection response” capability that interprets rejection into a clearer and easy to understand description.

Unless you conduct an internal audit, you will never be able to fix problems. Make it a policy to spend some time every month reviewing your EOBs and list the problem areas. Regularly conduct sessions with your staff to address the issues at their end, and let them know that their personal evaluation will include correction of these problems. This will help you solve multiple problems, and you can start getting paid appropriately and quickly.

If things still don’t improve or if you don’t have the time or manpower to conduct this audit, don’t hesitate to at least consider outsourcing your medical billing. You can call our consultants for a free practice evaluation at 212-852-0279 EXT 384. 

How to choose a reliable medical billing service?

Don’t Deny your Denials: What do Denials say about your practice?

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