As a hospital, the claim denial review process is a huge headache. It takes a great deal of time to analyze and process each claim, and these high-cost reviews can cost your hospital a lot of money. In 2010, it was estimated that between 10% and 20% of a hospital’s monthly managed care net revenue would be in an open state of denial at any given time.
Unfortunately, there’s no simple solution to improving the claim denial review process. Some denials are due to insurance company error, some are due to your staff’s error, and some are simply due to ineffective industry policies. Instead, the best way to tackle handling these more efficiently is by looking at specific data points. To assist you, here are four data sources that are necessary to make a claim denial review more efficient:
Basic Patient Information
It might seem simple, but analysis shows that errors leading to denials often begin with registration data entry. Make sure that the patient’s basic information such as their name, date of birth, and gender are correct. Most importantly, make sure that the insurance information is correct. Catching a simple error like this at the beginning could let you finish a denial case in a matter of minutes instead of hours.
Explanation of Benefits
One of the most common reasons that a denial happens in the first place is the coordination of benefits. When a patient has both a primary and a secondary payer, the secondary payer will almost always deny a claim that doesn’t include a detailed explanation of benefits from the primary payer. In fact, for some payers, this denial occurs automatically. To alleviate these denials, make sure you always collect all insurance information from patients, and verify both plans regularly.
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Codes and Diagnosis
During a denial review, it’s critical that you review the patient’s diagnosis and all medical codes. Make sure that the diagnosis in the history and physical examination matches the insurance claim. It’s always possible something got lost in translation.
Beyond that, make sure everything was coded properly. It’s important that you always keep up-to-date on the industry’s coding trends. Codes constantly change over time to allow for changes in regulations or care, and making sure they’re entered correctly makes handling denials much simpler.
Strong Historical Data
The best way to improve the claim denial review process is by taking a look at your hospital’s trends. You might have one coder that’s making a simple mistake constantly and causing an increased number of denials. On the other hand, you could find that one particular diagnosis is generating a disproportionately high number of denial claims. No matter what the case is, strong reports will allow you to proactively lower the number of denials you receive. This allows you to spend more time on the trickier denials and hopefully improving your success rate.
In the end, the claim denial review process is extremely complex with no magic button. By making sure to capture and pay attention to your data sources before and after denials occur, you’ll make the process easier and less costly for your hospital.