Moreover, he notes, collection rates decline dramatically the further out you get from when a patient was billed. That makes it important for practices to collect as much as possible from patients early in the process and to prepare patients for what they will owe by providing upfront cost estimates. Harding explains that providers can calculate these by pairing the patient’s benefit eligibility with the provider’s adjusted contractual allowable.
Practices can also up their collection rates by giving patients multiple payment avenues, including phone, portals or point of service, and by helping patients understand both their benefits and payment responsibilities. “It’s surprising the number of patients who don’t understand the connections between deduction, coinsurance and out-of-pocket maximum,” he says.
Harding says the other source of revenue leakage, claims denials, has been on the rise, citing a Change Healthcare study that found the average national rate increased from 9% in 2016 to 10.8% in the second quarter of 2020. Close to half of all denials, he adds, are the result of front-end revenue cycle issues, such as registration errors, incorrect demographics information and missing referrals. “That means right out of the gate at least half of your denials are preventable because they stem from missed or incorrect or unverified data,” he notes.
Harding recommends following these steps to reduce claims denials:
Identify the top causes of denials.
Implement measures for addressing those causes, such as improving registration and financial clearance processes and pre-bill edits.
Ask members of the practice’s claims denials team how they would work various types of denials and to document and share the responses. “It’s astounding the number of times we’ve seen different people have different appeals processes for the exact same payer and denial,” Harding says.
Identify the processes that have the best appeal or recovery rate, and implement those across the denials team.
Make information pertaining to every denial — such as the claim, provider, diagnosis and payer, and the steps taken to resolve the denial — available on one computer screen to easily accessed by every member of the denials team.
Evaluate the electronic health record’s work queue to ensure that deadlines for appealing claims denials are met. “No claim should miss the timely appeal window because you should have a work queue in place that identifies when an appeal is starting to age out,” Harding says.
Solutions and takeaways:
Communicate with patients prior to service, including your best estimate of costs and information about your practice’s payment policies.
Make it easy for patients to pay by providing multiple payment platforms and technologies.
Review claims denials and identify the top reason(s) for them.
Query staffers who handle claim denials to find the best recovery strategies for each payer and share that information with other members of the team.
Organize the claims denials workflow so that all necessary information is easily available to the person addressing the denial.