Denial analysis critical to your financial health
Denial analysis critical to your financial health
Make sure your appeals are timely
If you don’t know who is denying reimbursement for what procedures, your practice may be losing out on a lot of revenue, says Tammy Tipton, principal of Appeals Solution, a Lewisville, TX, insurance reimbursement consulting firm.
"What gets studied gets improved. Once you know where the problem is, you’ve taken the first step toward getting it resolved," she says.
If you know what kinds of claims are being denied and why, you can appeal in a timely manner and avoid losing money because the appeal was not filed on time, Tipton adds. "Many providers think that if the claim is filed on time, they’re got a lot of time to resolve an issue. In actuality, their managed care contracts give them only a certain number of days to file an appeal. The carrier may uphold a denial without telling them it was filed late," she says.
Many physician practices, particularly smaller ones, don’t bother to analyze their claim denials but, as insurers tighten their belts and deny more claims, getting a handle on your denials can be critical to the financial health of a practice, she says.
When Tipton has examined denial rates for her clients, she has seen rates that are as high as 5% to 10% or as low as 1% to 2% — a vast difference that can have a dramatic effect on a practice’s bottom line.
"A practice should know what percentage of denials it is getting and what its goal is going to be in getting that down," she says.
To successfully manage your accounts receivable collections, you need to know:
• What codes are most frequently denied.
• What carriers issue the most denials.
• What are the most frequently cited reasons for denials.
Tipton recommends that practices examine their denials monthly so they quickly can spot a problem or a change in reimbursement. "This can change dramatically over time. It has to be a continual process. The office should always review the denials and know the effect of the denials on the practice," Tipton says.
Denial analysis can be one of the most time-consuming aspects of accounts receivable management because there are so many different reasons for denials, she explains.
She recommends determining your top reasons for denials and tracking them over time. Many practices don’t analyze their denials because their practice management software doesn’t have the capacity to examine the denials effectively, Tipton says. The information can be gleaned from most software by a little extra work, or you can purchase add-on tools that allow you to look at your denials in more detail, she adds.
There can be a lot of reasons for your denials, and an analysis is the only way to tackle them, Tipton says.
For instance, you could be coding wrong; you may be getting denials because your claims aren’t filed in a timely manner; you could be performing treatment or procedures not recognized by some of your carriers; or a carrier could have decided to crack down on claims for a particular code.
Sometimes improving your denial rate is a matter of changing coding or using better documentation. Or if a large percentage of denials are from a particular carrier, you may need to talk with the carrier and find out what the problem is. Often it can be resolved through contract negotiations, Tipton says.
When claims are denied, you should have a process for getting an appeal out very quickly. "You don’t want a physician to take time out from seeing patients to write an appeal that is ignored," she says.
One way to speed up appeal of denied claims is to create a bank of letters that outline a general argument so that physicians call fill in the blanks and add the specifics of a case just as soon as the denial of benefits comes in. Once you get a feel for your top denial reason, you will have an idea of the types of letters you need to have ready.
The letters should be professional and should cite supporting authorities to argue why the claim should be paid, Tipton says. For instance, if the managed care contract supports the position, you should cite the contract. If there are laws that lend support, cite them.
"Part of the reason that appeals are denied is that [practices] don’t have the [facts] to back them up. Physician offices are flooded with information about new laws that are in their favor, but it’s hard to synthesize the information in a way to help the practice," Tipton says.
She suggests contacting professional organization, other physician practices, or consultants to help you generate prototype letters to appeal your denials.
Subscribe Now for Access
You have reached your article limit for the month. We hope you found our articles both enjoyable and insightful. For information on new subscriptions, product trials, alternative billing arrangements or group and site discounts please call 800-688-2421. We look forward to having you as a long-term member of the Relias Media community.