Leveraging Technology to Minimize Denials

Leveraging Technology to Minimize Denials

Written by Michael Rock, Vice President, National Medical Billing Services | March 08, 2017

The U.S. healthcare system is experiencing an epidemic of claims denials.

In 2011, the U.S. Government Accountability Office found that as many as 40 percent of all healthcare insurance claims made in one state were denied by commercial payers. While subsequent studies by various healthcare groups since then claim that figure is much lower, the results are still alarming. The latest widely published American Medical Association figures suggest 7.1 percent of commercial reimbursement claims contain errors, costing the healthcare system more than $40 billion over a recent four-year period.

For outpatient surgery center owners, there’s simply no question about it: A rash of denials can be very bad for business. They can cause productivity to lag, labor costs to skyrocket, and cash flow to be disrupted. But fortunately for facility owners and operators, the latest technology can help ASCs manage denials more effectively and reduce claim rejections altogether, and such tools offer administrators and physicians detailed insights into their revenue cycle.

But first, it’s important to understand the five primary reasons commercial payers today are denying claims and how they’re typically addressed:

  1. Medical necessity

This increasingly common denial typically suggests that the procedure was elective and fell outside the scope of a policy’s covered benefits. Providers are then tasked with proving that the procedure was, in fact, medically necessary, and that it comports with the insurance policy in question. In response, physicians may draft a formal letter arguing why the patient required this treatment.

  1. Records requests

In the post ICD-10 era, payers are increasingly requesting additional documentation or information before approving the claim; in fact, many carriers are going so far as to request a patient’s complete chart. Billing staff must look for consistencies in these requests, spot trends in retrospect by either carrier or procedure and stay ahead of the curve by sending in exactly what they’ve asked for on all future claim submissions.

  1. No authorization

Carriers more and more are claiming patients must obtain prior authorization before any surgery is performed. In some cases, it may be an error on the part of the insurance company in making the request; in others, lines may have been crossed with the physician’s office, which perhaps already obtained the go-ahead from the payer. The answer may be just a phone call to the physician’s office away. Some carriers also allow retro-authorizations or allow ASC billing to piggyback on an authorization obtained for the professional billing. If all else fails, providers are left no option but to file an appeal.

  1. Coordination of benefits

With thousands of forms and filings processed each week at busy centers, keystroke errors and other administrative mistakes are inevitable. However, one inaccurate keystroke may lead to a denial. In addition, it’s just as critical to have patients provide current and accurate insurance information with each visit to negate carriers asking the subscriber to coordinate their benefits and the subsequent denial. Frequent education and quality control are often the best ways to eliminate these mistakes.

  1. Coding

ASC-based coding is infinitely more complicated than its hospital-based and professional counterparts. And payers undoubtedly are seizing on this opportunity today to minimize reimbursements, using incorrect modifiers, invalid diagnosis codes, non-covered charges and bundling procedures together to deny a claim at every opportunity. It’s a challenging task. Coders must understand the required edit systems, state-by-state payer policies and disseminate information regularly with billing staff.

Leveraging technology

As the management saying goes, “You can’t manage what you can’t measure.” And denials are no exception. With the perpetual onslaught of denials in today’s ASC environment, it’s become problematic to manage rejections with antiquated processes. Leveraging the market’s latest technologies will invariably turn denials into manageable metrics. Make no mistake, the implementation and eventual infrastructure may have a modicum of cost and culture shock, but the results are overwhelmingly encouraging.

Third-party business intelligence applications can put outpatient surgery centers in the know, giving them levers and dials that marshall data with precision. This allows them to track and prioritize denials by financial class, dollar amount or denial type, giving the individual utter clarity on where to start.

Clearinghouses are another place to look. They increasingly offer denial management workflow tools that allow surgery centers to track and address claims efficiently. Several billing platforms provide robust functionality for mapping denial codes, allowing ASCs to manage denial trends proactively while developing quality reports that can help capture what would be lost or delayed revenue. Payer portals and websites, too, provide an opportunity to amend and resubmit claims in an efficient and timely manner, accelerating the cycle time and improving cash flow.

Implementing these tools does require set-up time and training. But these upfront investments inevitably pay substantial dividends over time, turning once tedious and archaic manual processes into an automated task that provides valuable, actionable insights.

Source: Becker’s ASC Review

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