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The RCM industry has tackled healthcare claim denials for a long period of time, yet revenue leakages seem to be inevitable due to denials. A talented team with an effective process, often helps in resolving the denials. We need a perfect mix of technology and people, to address the denials.

As per the Change Healthcare 2020 Revenue Cycle Denials Index, there has been a steady increase in the denial rate since their last analysis in 2017. The findings show a whopping 23% increase in medical claim denials and 11% of denials on initial submission in the third quarter of 2020. While Covid-19 did have an impact on such numbers, stronger strategies can alleviate the issue.

The most effective way to keep a check on the healthcare denial management process is the root cause analysis. The main purpose of vaccinating is prevention and that’s exactly the most effective strategy to handle denials as well. At Quintessence we follow a 5-step root cause analysis that has proven to be very effective in reducing denials by at least 50-60% for all our clients, at the first phase of transition.

Understanding the denial

It is important to understand the denial with respect to the specialty and not the payer denial code. Only this can help in formulating healthcare denial management strategies, for that particular specialty.

Determine root cause

It might seem very easy to determine the root cause of denials; for example, CO-4, CO-97, etc., all relate to coding issues. Here we simply move the claim to the coding team to make the appropriate change. Unfortunately understanding the root cause is not just the basic reason for denial, but the way in which the claim itself was processed. Let’s say for example, when a claim is denied with code CO-4, it is obvious that a modifier is inconsistent or missing. Here the root cause is not just understanding that it is a coding issue, but also understanding why the procedure was billed with an inconsistent modifier, or why it was billed without a modifier.

a) Is there a lack of understanding on the correct way to code?
b) Were there any changes recently in usage of modifiers with reference to the procedure or DX code?
c) Are there any other process error (e.g. issues with coding or Coding Automation) for repeated occurrence of denial?

These are some of the many perspectives on the way in which the root cause is to be determined.

Collect and analyze historic data pertaining to the denial

A root cause analysis is not effective if it is only worked based on the present cause. When making changes to coding, documentation, etc. based on the present information, the claim may not fulfill another requirement, which in-turn might lead to payer denial with another code. All data relevant to the specific denial needs to be analyzed, to determine if there is any pattern in the denial, or any other cause-and-effect factor that might have been missed in the previous step.

Drafting and implementing strategies

This is what we at Quintessence enjoy the most. A dedicated team, consisting of coders, billers and AR specialists, that just focuses on resolving denials, help in formulating prevention strategies. These strategies not only resolve the cause, but also aid in complete elimination of the issue. Our solutions typically involve 50% of AI and Machine Learning techniques, as well as creating a solution handbook that we keep updating. This helps everyone working on the process without the need for any assistance. The main benefit of such a solution is that it eases the process of training any new team member and acts as a continuous aid in healthcare denial management.

Follow up on outcome

The effectiveness of the strategy only depends on a successful outcome. That’s why at Quintessence, our SLAs are all about clear numbers. We only get paid when you do, because we are confident that our solutions help you recover at least 70-80% of your lost revenue.

Not every provider can achieve a zero-denial rate. A denial rate of less than 5% is an ideal way to protect revenue. Anything above that, indicates a hiccup in the process. As easy as the prevention sounds to be, healthcare denial management requires a team to work at every aspect of the Billing Process. It requires an eye that can see through camouflaged issues. With identifying root causes and opportunities for improving certain process flaws, there is a sure possibility to minimize your denials.