Nobody wants denied claims. It adds up more of your time and resources to sort everything out and most importantly, slows down your cash flow.
One or two erroneous claims maybe few for now but these may add up pretty quickly — and before you know it, a large issue has surfaced, and that issue could cost you and your clinic a fortune.
Reworking Denied Claims are Costly
According to a research, you get to spend an additional cost of $25 for every rejected claims that is resubmitted. And that number is rising annually, according to Medical Group Management Association (MGMA). So, when you add up the total cost of a denied claim could end up around $31.50. And if you have more than 4 denied claims, that could cost you more than a hundred dollars — and that’s too much.
That would definitely hurt your clinic’s cash flow, where instead of earning, you get to spend instead.
Un-reworked Denied Claims
Did you know that 3.8% of all claims are returned to providers with denials, and only 35% of those denied claims are ever fixed and resubmitted? Now, talk about big losses! That number alone should be enough to prevent denials in the first place. According to a healthcare industry has had a longstanding practice of appealing and fixing denials, namely Zindi, 90% of denials are preventable.
So, how do we handle denied claims? Let’s start by optimizing your billing process and avoiding the following:
8 Common Denial reasons
- Incorrect data (e.g., erroneous data-entries)
- Incorrect or missing insurance information
- Missing claim details (e.g., codes and modifiers)
- Missing or invalid referral or authorization information
- Incorrect or missing provider credentials
- Late submissions (outside of the payer’s timely filing window)
- Incorrect beneficiary information
- Failure to submit payer-requested information
The best way to prevent denials on the whole is to truly understand why you’re receiving them in the first place. The next step to do is this:
Track Denial Codes
- Identify the denial error code—and note it in a denial management log.
- Reach out to the payer to understand the reason for the denial.
- Correct and rebill the claim in accordance with the payer’s instructions (i.e., don’t leave money on the table).
- Document all details of the process—including all interactions you have with the payer.
- If you resubmit the claim and still receive a denial, appeal within seven days of the payer’s final determination. (According to McCutcheon, claims submitted within seven days have a 67% chance of being paid; claims submitted outside of that window have only a 40% chance.)
- Regularly review your denial management log to identify trends and remedy the root of the problem.
Being one step ahead in your medical billing is one way to avoid further problems and issues especially in your clinic’s cash flow. With Park Medical Billing, our custom built claim Scrubber applies an extensive set of general and payer-specific edits before preparing the claim for processing.
Call us today and let’s talk. Dial 1-201-585-7306.