By Cherie Puthoff, RHIA, CPC, RCC, and Karen Perts
Cherie Puthoff, RHIA, CPC, RCC, Director of Coding, HealthPro Medical Billing
Denied claims are a fact of life for radiology practices, and they are a ubiquitous part of the health care industry. Even the most thorough billing processes generate a small percentage (3–6%) of claims that are denied for legitimate reasons other than noneligibility—it’s a reality of the business. But beyond this acceptable range of denied claims that are bound to occur, unsound processes can push denial rates to as high as 15% to 25%. And because lost potential revenue due to denied claims is essentially equivalent to the denial rate itself, this means that in a case where a practice has 25% of its claims denied, that practice is forfeiting 25% of the money it has earned.
Fortunately, there are ways to minimize denials and optimize revenues that are relatively easy to implement and are very effective. In the end, reducing denied claims boils down to assessing current workflow problems and developing strong processes and denial management strategies that are built on the latest best practices. And while generally speaking, the solutions themselves are simple, finding the right approach for your practice may take time, so be prepared to change your strategy as many times as it takes to get it right.
Karen Perts, Director of Account Management, Patient Account Services, HealthPro Medical Billing
Denial Management Strategies & Best Practices—The Triangle Approach
Coding and Quality Assurance, the Posting Processing, and Accounts Receivable—this is the workflow trifecta that keeps denials in check. Having a strong front-end process is critical to cutting denial rates. And while different strategies can be effective for different billing operations, we have found that a three-pronged approach that focuses on utilizing high-quality data and experienced, persistent employees who use the payor tools made available to them provides the most successful outcome. Our Triangle Approach starts with Coding and Quality Assurance.
Coding and Quality Assurance
Careful, accurate coding can eliminate many denial headaches before they begin. This is why it is crucial to have coders on staff with the education, experience, and attention to detail required to extract the appropriate CPT procedures, modifiers, and ICD-9 diagnoses to ensure the claim is clean the first time through. For the highest degree of accuracy, coders also must be aware of local coverage determinations. Coders should be up on all the latest code updates and published guidelines, and have access to the tools that allow them to do their jobs effectively. Coding goes hand-in-hand with Quality Assurance because if you start with bad data (coding), you end up with a spoiled process that yields higher denial rates.
Advancements in technology have improved Quality Assurance initiatives throughout the industry by leaps and bounds. With intelligent bill-scrubbing software and data-mining programs, it is easier than ever before to extract data on all kinds of different variables that affect billing and directly influence denial rates. Once you have set key criteria, it is possible to discover trends in your billing that reveal common causes for denials and opportunities for process improvement.
Having clean billing records and claim filings makes life much easier for accounts receivable, and improves the overall efficiency, effectiveness, and profitability of your billing operations.
Posting Processing
All of the efforts to file a clean claim in the front end of the Coding and Quality Assurance process are crucial to how the payor will respond to the claim. The next step of the denied claim workflow is how the denied claim will be routed back to the billing company within internal workflow. As with Quality Assurance, technology automates the posting process, but human interaction is still critical to ensure there isn’t a breakdown within the electronic remittance process. Well-trained and experienced payment posters who are proficient with the myriad ofpayor EOBs (Explanations of Benefits) are the most effective gatekeepers to ensure that the denied claim reenters the correct internal denial workflow queue for the accounts receivable team to process.
Accounts Receivable
Accounts Receivable is where the proverbial rubber meets the road in the battle against denied claims. Once the coders and Quality Assurance personnel have authenticated the correctness of the claims prior to filing to the payor, it is up to accounts receivable to get down to the business of delivering the money that has been earned. To help eliminate lost revenues, the accounts receivable team should be familiar with the timely filing guidelines of all the payors they are affiliated with. All available resources should be engaged to resolve a denied claim.
These include frontline representatives and IVR (Interactive Voice Response), but never underestimate the usefulness and efficiency of a well-designed payor website that offers an adequate member eligibility search and interactive denied claim management. Taking advantage of a good payor website can do wonders for your denied claims rate and the morale of your staff.
Pursuing every single claim should be standard operating procedure for any reputable billing company. That being said, having a deliberate, proactive strategy to working the most recoverable and profitable denied claims can increase revenues by limiting losses due to lapses in process oversight. In addition, accounts receivable should constantly challenge internal operational processes and strive to find more advanced and diverse methodologies for improving their denial rates against those of their competitors. Identifying denied claims trends that represent the majority of lost revenues and working denied claims within unique carve-out strategies are instrumental to gaining the highest reimbursement of appealed and reworked denied claims payments.
No two radiology practices are exactly the same, but by enacting these simple and effective strategies to develop strong processes, any team can successfully navigate denied claims and capture more revenue to expand profitability.
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Cherie Puthoff, RHIA, CPC, RCC, is Director of Coding for HealthPro Medical Billing in Lima, Ohio. Karen Perts is HealthPro’s Director of Account Management, Patient Account Services and also oversees operational training.
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