It has been accurately stated that you cannot manage what you do not measure. This is particularly true in the arena of medical billing denials. Without a strong Revenue Cycle Denial Management system in place you cannot properly manage this critical element of medical billing. If you are not managing your denials then you are most likely leaving more than 20% of your revenues uncollected.
Revenue Cycle Denial Management has become a universal and often abused term in medical billing. Some individuals use the term to describe a means of addressing claims denied for medical necessity. Others use the term to describe how some information is tracked for a specific payer, set of procedures or a place of service. Still others try to use it to describe what they do daily in the physician's office.
Given all of this confusion, how do you find out if your medical billing company or medical billing department is utilizing proper denial management for your practice? A good start is to ask a few simple questions: What do they believe denial management entails? What metrics do they utilize to measure denial management success? How much have they increased your collections in the past 6 months through their denial management system?
A good denial management system is not simply about working denials, it is about systematically gathering the data required to eliminate denials. Working denials is like pumping water from your basement when a pipe bursts. Denial management is about fixing the pipe so you no longer need to pump water from the basement.
The system accomplishes this needed service by tracking, quantifying, and reporting on every claim billed for which any payer denied the service. The reporting should be comprehensive, tracking all denials (not just selected denials). If used properly, the system can reduce first-time claim denials by over 50 percent. Many practices have no way of monitoring if payers are denying their claims at excessive or unwarranted rates, or even for what reason. These practices are probably losing 10 to 20 percent of their total revenue.
Although many practice management systems can properly track claim denial information, few systems have the rare combination of having been both properly implemented to track the data and properly understood to extract the data in a meaningful manner. Without both of these elements the denial management process cannot properly provide the feedback on denials that is required. Even when this information is present, often there is no mechanism for feeding the information back into the medical billing process to correct billing problems.
Your denial management system must 1) Track all denials by payer; 2) Report on the reason for the denials and the number of claims denied for each reason; and 3) Allow for in depth analysis and comparison across payers to identify important trends. Once these capabilities are in place, the medical billing specialists can create targeted process changes and claim edits/rules that will fix systemic billing issues and increase collections.
The in depth analysis described above also allows payers that are habitual violators of Clean Claim Rules to be identified and pursued. The data and analysis will allow many opportunities for process improvements and revenue enhancement for the practice.
As previously mentioned, an effective denial management system is critical for your practice if you want to improve your medical billing and hasten your collections. Implementation of the proper system can easily increase collections by more than 10% and could even exceed a 20% increase in collections.
Copyright 2008 by Carl Mays II
Revenue Cycle Denial Management has become a universal and often abused term in medical billing. Some individuals use the term to describe a means of addressing claims denied for medical necessity. Others use the term to describe how some information is tracked for a specific payer, set of procedures or a place of service. Still others try to use it to describe what they do daily in the physician's office.
Given all of this confusion, how do you find out if your medical billing company or medical billing department is utilizing proper denial management for your practice? A good start is to ask a few simple questions: What do they believe denial management entails? What metrics do they utilize to measure denial management success? How much have they increased your collections in the past 6 months through their denial management system?
A good denial management system is not simply about working denials, it is about systematically gathering the data required to eliminate denials. Working denials is like pumping water from your basement when a pipe bursts. Denial management is about fixing the pipe so you no longer need to pump water from the basement.
The system accomplishes this needed service by tracking, quantifying, and reporting on every claim billed for which any payer denied the service. The reporting should be comprehensive, tracking all denials (not just selected denials). If used properly, the system can reduce first-time claim denials by over 50 percent. Many practices have no way of monitoring if payers are denying their claims at excessive or unwarranted rates, or even for what reason. These practices are probably losing 10 to 20 percent of their total revenue.
Although many practice management systems can properly track claim denial information, few systems have the rare combination of having been both properly implemented to track the data and properly understood to extract the data in a meaningful manner. Without both of these elements the denial management process cannot properly provide the feedback on denials that is required. Even when this information is present, often there is no mechanism for feeding the information back into the medical billing process to correct billing problems.
Your denial management system must 1) Track all denials by payer; 2) Report on the reason for the denials and the number of claims denied for each reason; and 3) Allow for in depth analysis and comparison across payers to identify important trends. Once these capabilities are in place, the medical billing specialists can create targeted process changes and claim edits/rules that will fix systemic billing issues and increase collections.
The in depth analysis described above also allows payers that are habitual violators of Clean Claim Rules to be identified and pursued. The data and analysis will allow many opportunities for process improvements and revenue enhancement for the practice.
As previously mentioned, an effective denial management system is critical for your practice if you want to improve your medical billing and hasten your collections. Implementation of the proper system can easily increase collections by more than 10% and could even exceed a 20% increase in collections.
Copyright 2008 by Carl Mays II
About the Author:
Carl Mays is Co-Founder of ClaimCare Medical Billing Services, a medical billing company that serves clients across the U.S. Carl has been helping clients with Medical Billing problems and practice management solutions for more than 10 years. You can learn more about world-class medical billing processes by searching for the rest of Carl's articles on medical billing.
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