Featuring: Austin Brennen | AVP, Revenue Cycle Denials + Appeals
Insurance companies are increasingly denying payment of medical claims received from healthcare providers. A recent report found that 11% of claims were denied in 2022, which equates to 110,000 denied claims for the average-size health system. The rate of prior-authorization denials doubled in the past year alone and request-for-information denials, which essentially serve as pre-pay audits for payors, are increasing rapidly.
With financial pressures continuing to increase and operating margins continuing to compress, providers can’t afford not to implement effective denial management and prevention strategies.
To stay ahead of increasing denial trends and ultimately reduce claim denials, here are three things to stop doing now:
1. Stop Downplaying the Importance of Scheduling
Historically, the scheduling function was primarily focused on ensuring a provider had enough time booked and was maximizing a “blocked schedule”. Now, scheduling is gateway into reimbursement. Without the right information captured and right steps taken, we can be certain of medical necessity and authorization-related denials before the patient is even treated. You should be obtaining prior authorization when necessary. Establish and maintain authorization requirement policies to make scheduling the right way the easy way.
Pro tip: Train front-end teams on the financial impact denials and claims resubmissions have on the organization so they understand the implications and importance of their roles. Ensure all teams involved understand the amount of rework their efforts will decrease by preventing denials from occurring.
2. Stop Being Blindsided by Payor Behavior
The lack of transparency in payor behavior and inconsistency in their processes continue to drive significant claim denials and make it incredibly challenging for providers to keep up. Some insurance companies, for example, use third-party vendors to issue prior authorizations but don’t inform providers of these partnerships or their requirements. This can lead to services being denied even though they appear as “no auth required” by the insurance company because the third-party itself requires an authorization – a requirement providers often don’t learn about until after the claim is denied. The amount of payor policy updates and unilateral rule changes can also make it difficult for providers to know what to expect from payors and stay compliant with their requirements beyond authorizations.
Pro tip: Engage with your payors. Ask them to outline their own processes for using third-party authorizers so your teams can appropriately manage the requirements and prevent unnecessary denials. Leverage managed care partnerships to hold payors accountable for improper authorization denials. Thoroughly review and understand the ins and outs of your payor contracts to ensure all requirements, even beyond authorizations, are met. Establish a mechanism to continually monitor for payor policy updates and contract changes to ensure your teams stay ahead, stay compliant and avoid delayed or lost revenue.
3. Stop Addressing Denials After They Occur
Develop processes and establish a strong denial prevention program that is data-based and process-minded. Data collected over time is just the starting point. Leverage initial denial and final denial data to thoroughly research accounts and look at them holistically, function by function, to identify risk areas and real root causes.
Form a hypothesis. Engage other departments to test it. Ask questions like “What is documented? What do we not see? Where are the gaps?” True root cause resolution not only requires an understanding of the actual source of denials, but also an ability to connect the right dots across the revenue cycle, clinical departments and various stakeholder groups to resolve the identified issues.
Pro tip: Make sure you’re solving the right problem, not just the perceived problem. Combine technology with expertise to build necessary logic to flag accounts with certain risk factors and build rules-based work queues to address specific issues. Form a denials prevention committee capable of analyzing denial trends, sharing results with various stakeholders and holding parties accountable for upstream issue resolution.
Merely monitoring denials is not enough.
The rate payors are denying claims continues to increase, putting millions of dollars at risk for providers each year. Providers need effective denial prevention strategies to combat these trends. As payor tactics continue to change, providers must quickly adapt to prevent unnecessary lost revenue and ensure they can continue delivering on their missions in their communities. Addressing these three critical areas will strengthen the foundation of your prevention and reimbursement program.
Are you confident in your denial prevention strategy? If not, there’s no time to waste.
Find out how Ensemble can help assess your current denial prevention capabilities and implement a sustainable program for continued success.
Austin Brennen is an experienced change management leader with more than 10 years of experience in healthcare revenue cycle, specializing in denials prevention and revenue control. Austin serves as the AVP of revenue cycle denials and appeals at Ensemble Health Partners, ensuring that effective denial prevention strategies are developed with our hospital, health system and affiliated physician group partners to maintain best practice performance metrics and avoid preventable lost revenue.
These materials are for general informational purposes only. These materials do not, and are not intended to, constitute legal or compliance advice, and you should not act or refrain from acting based on any information provided in these materials. Neither Ensemble Health Partners, nor any of its employees, are your lawyers. Please consult with your own legal counsel or compliance professional regarding specific legal or compliance questions you have.