Roughly 65% of rejected claims aren’t reprocessed for resubmission (Zindl, 2021). As one of the healthcare industry’s numerous challenges, the upward trend of denied claims persists, with many left unaddressed. This has repercussions for both providers and patients alike.
When denied claims remain unsubmitted, providers face substantial losses. Beyond revenue, these rejections strain staffing resources. Mitigating this issue demands proactive measures, such as educating staff, to reduce the volume of denied claims. Education helps tackle underlying causes and continually addresses shortcomings amidst evolving systems or updates.
What Are Typical Causes Behind Rejected Claims?
Claims are often denied for various reasons, primarily stemming from administrative and coding errors.
Administrative Errors Encompass:
• Absence of demographic details
• Eligibility discrepancies
• Duplicate submissions
• Missing filing deadlines
• Bundle payment issues
Coding Errors Involve:
• Date disparities
• Inappropriate code combinations
• Incorrect modifier application
• Insufficient medical justification
Moreover, documentation errors can significantly disrupt both administrative and coding workflows. Any inaccuracies or faulty information reflected on the claim form contribute to confusion, increased administrative workload, and a subpar patient experience.
The Fiscal Ramifications for Healthcare Institutions
The repercussions of revenue loss are concerning in any scenario. In the realm of claims denials, research shows that $1 out of every $10 can vanish (Bowman et al., 2019). Furthermore, the expense to resubmit denied claims averages $25 per claim, climbing to an estimated $181 per claim for hospitals.
Denied claims result in revenue depletion through various channels, notably through the additional labor costs incurred in resubmitting claims. The resolution of denied claims is a time-intensive process, leading to escalated costs and revenue loss, often becoming an organization’s most time-consuming task. The administrative efforts involved in managing denied claims demand substantial staff time.
The diminished revenue stemming from these denials poses challenges for healthcare organizations, hindering their ability to meet financial obligations like staff payments and facility maintenance. This necessitates a strategic allocation of resources within healthcare entities to effectively address the escalating number of denied claims.
Strategy #1 – Proactive Training
An optimal method for handling claims denials involves a proactive stance, with education emerging as the linchpin. A proactive approach hinges on equipping staff with the necessary knowledge for streamlined claim processing, aiming for accurate submissions on the initial try—a fundamental objective in claims management.
Educating staff stands as a pivotal means to circumvent prevalent billing errors that often lead to claim rejections. Comprehensive billing education empowers healthcare professionals to adeptly code and bill for medical services.
The effectiveness of such educational initiatives heavily relies on the breadth of their scope. The program’s coverage should span all facets of the billing process, encompassing, among others:
• Medical terminologies
• Coding procedures
• Payer requisites
• Reimbursement protocols
• Bundle payment intricacies
• Precise documentation practices
• Patient access procedures
• Grasping health insurance nuances and navigating insurance follow-ups
• Patient registration protocols
• Understanding and applying medical necessity criteria
Proficiently Skilled Employees Create an Impact
A knowledgeable workforce enhances the caliber of submitted claims, resulting in either clean claims or the interception of errors before submission. This minimizes both revenue loss and time inefficiencies.
Education Focused On Coding and Billing Practices
Educational proficiency in coding and billing is vital for both claim creation and resubmission after denials. It’s imperative for all billing-involved staff to possess this expertise.
Additionally, staff should be equipped with the competencies to handle rejected claims, comprehending rejection codes, the denial resolution process, and adeptly reviewing claim forms.
Documentation Improvement
All personnel need a solid grasp of fundamental principles, fostering uniformity across the team. Accurately capturing essential documentation is a shared responsibility, with a heightened focus on clinical document improvement (CDI) staff.
Accessing data from CDI-managed databases is pivotal for precise billing, aligning with the accuracy maintained in the electronic health record (EHR) database. CDI’s objective is to reduce discrepancies in documentation, a goal achievable through comprehensive education programs fostering a robust knowledge base.
Insurance Regulations and Compliance
Comprehending the stipulations set by insurance providers and payers is crucial for adhering to claims processing regulations. This entails understanding the verification procedures and effectively informing patients about their financial obligations regarding medical care. Confirming eligibility prior to a patient receiving medical services brings clarity to the claim processing.
Adherence to payer-specific guidelines significantly reduces claim denials for organizations. However, it necessitates staff to possess a comprehensive understanding of each payer’s coding directives.
Benefits of Coding, Billing, & Documentation Education
Training staff in coding, billing, documentation, and payer requisites diminishes the probability of claim denials. Detecting errors before submission expedites payment receipt, enabling organizations to redirect billing office resources to other administrative tasks.
The substantial expenses associated with appealing denied claims underscore the necessity for intervention. Proactively tackling this issue through staff education serves to reduce appeal costs effectively.
Strategy #2 – Empowering Informed Patients
An informed patient comprehends the dynamics of insurance and their role in shouldering financial responsibilities for their medical services. Patient education regarding their obligations minimizes confusion and facilitates prompt payments.
Staff equipped with a grasp of payer requisites is better positioned to educate patients, understanding precisely what information to gather from them. Informing patients about the necessary information prior to their medical visits allows staff to collect accurate data efficiently.
The registration process stands as the primary cause for denials (Arias, 2021). Emphasizing adherence to payer requirements during this process underscores the importance of providing patient education.
Strategies for patient education
Effective patient education relies on well-informed staff equipped with the tools for educating patients.
Utilizing simple language that patients comprehend is crucial during patient education. Communication in the patient’s preferred language helps overcome language barriers, hearing impairments, or reading difficulties.
In instances of barriers, adapt educational methods to suit the patient’s learning style. For those who can read, offering documents in their preferred language is beneficial, while using written materials assists patients facing hearing challenges.
Strategy #3 – Precision in Documentation
Accumulating precise patient information stands as just one among several steps in the process, constituting a crucial piece of the comprehensive information to be collected. Accurate documentation of services rendered to patients is imperative.
It’s vital to educate providers to correctly identify and document their services. This documented information serves as the basis for coding and billing, and its accuracy is contingent upon the precision of the provider’s recorded details.
Strategy #4 – Collective Learning
Preventing claim denials necessitates the entire staff’s commitment. Collaboration within the organization becomes paramount for processing error-free claims, starting from patient information collection to reimbursement procedures.
Regulatory compliance is an indispensable facet of the claims process that organizations must prioritize. Proficiency in this domain ensures staff process claims in adherence to regulations. Every department, including coders, auditors, managers, and others, should possess competency in regulatory requirements and know where to access pertinent resources.
Crucial stakeholders involved in claims processing—registration, case management, financial services, nursing, health information management (HIM), physicians, coders, auditors, and managers—need to collaborate extensively to reduce claim denials. Identifying resources and leveraging collective expertise to implement solutions for claims denials, including educational initiatives, becomes imperative.
Strategy #5 – Continuous Education
Regulations and requirements evolve continuously, with payers adapting to changing regulations. Staff must stay updated on these changes to continually enhance the reduction of denied claims.
Sustained improvements in reducing claim denials can be achieved by ensuring all staff receive ongoing education. Identifying gaps in staff knowledge helps direct the necessary continuing education within an organization.
Creating a culture that values learning and development encourages staff to embrace ongoing training. By continually educating themselves on recent changes in claims processing, staff becomes an essential element in decreasing denied claims to manageable levels.
Strategy #6 – Technology Integration and Data Utilization
Failing to harness technology would be a missed opportunity in preventing claim denials. Technology holds substantial potential to decrease claim denials, provided there’s a clear process and understanding of its utilization within the organization.
EHR and Claims Management Software:
Patient portals serve as valuable resources for acquiring current patient information. Utilizing this data in the claims process, provided it remains up-to-date, can effectively eliminate documentation errors. Tasks that were once time-consuming become more manageable through the integration of such technological resources. Ensuring all staff are well-versed in available technology and its utilization can alleviate the challenge of accessing accurate information.
Data-Driven Insights for Root Cause Identification:
Pinpointing the underlying reasons for claims denials is crucial for directing an effective education program. Leveraging metrics and data derived from technology offers a comprehensive view of current processes and identifies areas of deficiency. Consequently, education initiatives can be strategically implemented based on this analysis.
As a foundational element for education, testing and reports stand as pivotal technologies in crafting an educational program. Having a clear objective for training ensures the establishment of precise and achievable goals.
Strategy #7 – Acknowledging Challenges
Launching any education program encounters hurdles. Some potential obstacles include:
• Employee buy-in
•Staff shortages
•Staying updated
• Patient education
Employees must grasp the significance of accurate claims submissions and recognize that education fosters this accuracy. When employees value the program, their participation increases.
The claims submission process might demand significant staffing resources. Diverting staff for education could further prolong the submission process.
The ever-evolving nature of insurance claims complicates the creation of accurate education programs. Staying informed about all new changes across various payers remains essential.
Patients play a role and may require education about their insurance requirements, potentially burdening the provider. Hence, staff must also serve as educators.
Strategy #8 – Addressing Obstacles
Encountering obstacles is typical when introducing new programs or processes. Anticipating these hurdles and preparing strategies to manage them alleviates potential difficulties.
Highlight the significance of precise claim submission and demonstrate how staff education mitigates this challenge. Simultaneously, ensure program accuracy by staying updated on industry changes.
Educational content should employ simple language for both staff and patients. Translate complex concepts into easily understandable terms and supplement information with visual aids such as diagrams, videos, and brochures.
Ensuring training is easily accessible and efficient minimizes disruptions to staff work, especially during staffing shortages.