Denials are an annoying, yet inevitable, part of the revenue cycle; but that doesn’t mean you can’t minimize denied claims. In fact, 86–90% of denied claims are preventable, per the Kaiser Family Foundation.
While there are a lot of reasons insurance providers deny claims, this post will target the largest reason that claims get denied: front-end issues.
As it happens, almost half (49.7%) of denials are caused by problems on the front end, per the Change Healthcare 2020 Revenue Cycle Denials Index. Some of these denials are unrecoverable losses and some easily recovered, though monotonous in nature to continually appeal. The only truly positive part about front-end denials is that most are entirely preventable. If your front-end processes are contributing to your denials, you can make immediate changes that will quickly and positively affect your revenue this fiscal year.
Change Healthcare broke down front-end caused denials even further with the following statistics:
Registration and eligibility
Accounting for a little over one-quarter of all denied claims, registration and eligibility continue to be a huge problem in the American healthcare system. Denied claims that stem from these issues might include things like demographic data mismatches and ineligibility (i.e., lots of missing or incorrect information right from the beginning).
Other registration and eligibility-related issues include things like coordination of benefits, invalid authorization, benefit maximums being reached, denied authorizations, plan coverage and a patient’s services exceeding what was authorized.
Registration and eligibility can be daunting for revenue cycle experts, but it’s actually not a terrible weak spot to have if it’s your biggest pain point. It means you can immediately reduce denials with some diligent process changes (to registration, prior authorization) .
The importance of pre-registration
Mistakes and broken processes at the very beginning of the patient encounter have a ripple effect that often ends with a denial. Since so many eventual denials stem from issues having to do with registration and eligibility, your physician practice’s front desk and registration staff play a huge role in preventing them.
It’s not a bad idea to implement a robust and tech-driven pre-registration process that completes crucial registration steps with patients prior to their service. At least 24 hours, but preferably earlier—before a patient’s scheduled service, the physician practice should verify the patient’s demographic data; verify their insurance coverage and benefits; and notify the patient of their financial responsibility, according to HFMA’s “Patient Financial Communications Best Practices.”
Without a strong pre-registration process in place, it’s easy for one patient’s name to be spelled incorrectly or another patient to have a brand-new insurance that they forgot to tell you about since their last visit. Before you know it, you’re stuck with denials.
Physician practices can use technology tools (such as Rivet) to automate these processes, such as enabling real-time insurance eligibility verification, rather than relying on outdated and time-consuming methods like phone or fax.
Rivet’s estimates and eligibility software, for example, lets you run eligibility checks in bulk actions and collect accurate payment from patients before services are rendered. It’ll even detect possible prior authorization needed so you can even prevent denials that way, too.
Improving the prior authorization process
Payers use prior authorizations—essentially, giving the provider an up-front OK to perform a service—to save money and make sure a procedure is safe and necessary for a patient before they receive it. And although lots of physicians say prior authorizations delay care and take away their authority to make medical decisions for their patients, they’re still a fact of life, and failing to obtain one when a payer requires it will lead to denials that could have been avoided.
The key is to proactively check prior authorization requirements and obtain any prior authorizations before delivering patient service. To streamline this process, you can use automated tools (such as Rivet) that integrate with your practice’s EHR and alert practitioners that a prior authorization is needed when they place an order.
Denials, here to stay?
So, let’s say you get robust software, change your registration and eligibility processes and clear up issues with prior authorization. Unfortunately, no matter how much of your front-end processes you change, you’ll still have denied claims.
But now you’ll have exorbitantly less denials than before, and you’ll boost your net revenue without seeing more patients. Overall, you’ll see great changes that help your practice run smoother and you’ll see revenue that you probably wouldn’t get to see otherwise.
That’s because even though two-thirds of denied claims are recoverable, the MGMA estimates 50–65% of denials are never reworked.
To read more about denials, check out our free ebook, "How to Avoid Denials."
To learn more about Rivet, download this one page PDF: