Management strategies for denials in medical billing cycle

  • Written by Yash Rajan
  • Monday 5th September 2022
Management strategies for denials in medical billing cycle VLMS Healthcare

Denials are the most significant setbacks in the medical billing cycle. Claim denials delay the overall revenue generation for the healthcare organization. With the healthcare industry facing issues such as lack of employees, increasing federal regulations, consistently changing regulatory landscape, etc., revenue generation delays increase this burden even more. Hence, an effective management strategy can provide valuable assistance in such cases. There can be various reasons behind a denied claim. Lack of clarity in filing the charges, use of inappropriate medical codes, quality of the charge entry and claim application, etc., are some of the most common causes behind an insurance claim denial. Most healthcare service providers lose a significant part of their revenue because of these reasons. Hence, a successful denial management strategy is necessary to avoid the loss of valuable revenue. It is up to the organization to form such a strategy. To get an idea about the areas which need improvement, the organization can study the denied claims and understand the reasons behind those denials. Comprehending the reasons behind failure can lead the organization to have successful claim management.

The first step in having a successful denial management system is to assemble all the teams in the healthcare organization and bring them on the same page. This assembly can avoid miscommunication in the groups and thus the claim denials. Various teams such as health information management (HIM), medical coding, clinical documentation improvement (CDI), clinicians, etc., need to be kept in the loop. Keeping the teams in the healthcare organization in the loop ensures a proper flow of information.

The flow of information throughout the organization can eliminate the common issues such as ‘Discharged, Not Final Billed’ (DNFB), and quality and preciseness of medical codes. Having frequent audits as part of the denial management system helps identify and address the issues that lead to claim denial. Audits can also help highlight the factors that lead to successful claims, which can guide future claims management strategies. Such practices can help the organization implement a cross-functional approach, which can educate the staff about the how-tos of the medical billing cycle and the contribution of each team.

The healthcare organization can create the management strategy independently, or they can opt for the dedicated medical billing firms. Outsourcing the management of claim denials and the overall medical billing cycle can save the organization from investing their valuable time in claims handling. Having the external firm handle the claims can help them focus on providing healthcare services and improving their relationship with the patients.

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