Why Private Practices Need Insurance Denial and Appeals Management 

Why Private Practices Need Insurance Denial and Appeals Management 

Denial and appeal management is a critical part of any private practice or healthcare system. It plays an important part in revenue cycle management and reducing denials and appeals makes it easier for providers to get paid. Denials have always been a struggle for providers because they take up so much time and require extra resources. 

As insurance companies get more particular and technology continues to evolve, a lot of questions arise about why claims are being denied. In fact, recent studies have estimated that as many as 90% of all insurance denials are completely preventable. To do that, providers must first have an effective denial and appeal management process in place. 

Common Reasons for Insurance Denials 

Taking a proactive approach starts with education and understanding. According to the experts, the most common denials are because services aren’t deemed medically necessary. Some other common denials include:

  • Duplicate billing
  • Upcoding or unbundling 
  • Lack of supporting documentation
  • Prior authorization required
  • Referral required
  • Services not covered 

Most people aren’t well-versed in all the coverage on their health insurance policy. For this reason, it’s important to help educate them on confirming their coverage so that claims denials can be avoided. In the same regard, you’ll want to make sure that your billing is done correctly and that all referrals, preauthorization requests, and services are verified for coverage first and foremost. 

Regarding internal causes, complex claims processing methods, disjointed systems and processes, and inadequate support or insufficient resources are all on the list of the top offenders. Practitioners looking to improve their denial and appeal management should start with these internal factors to ensure the problem isn’t their own. 

Best Practices for Insurance Denial Management 

Effective management of claim denials and appeals can boost your revenue stream and improve patient satisfaction, among other benefits. However, before you can start streamlining the processes and finding solutions, you must understand why claims are denied in the first place. This is easy to do when you monitor your claims submission reports, which give you an overview of all the outstanding insurance claims. 

You also need to understand the two types of refusals to pay: denials and rejected claims. 

Rejected claims are those denied on the front end; that is, they didn’t reach the underwriters and were rejected from the payor or clearing house, in most cases. This is usually due to things like missing information fields or terminated policies.  

Denied claims have been processed and evaluated, and then denied for any number of reasons, from a lack of coverage to a lack of medical necessity, and more.

Practices need to have a standard workflow in place for insurance denials. This should include separate approaches for different types of denials and all employees should be trained on the denial management process. Once there is a strict protocol in place, you will be able to identify where the root cause of the issues lies. 

The Complicated Nature of Appeals

Appeals offer providers a way to recoup some of their losses, but only for those who are willing to jump through all the proverbial hoops required. Over the past couple of years, appeals success rates have dropped about 10%, proving that it is becoming even more difficult to fight back against a denial. The solution? Avoid the denial in the first place with better denial and appeal management. 

Appeals take a lot of time and resources. They are the longest route to recovering money that a practice or healthcare provider is owed. In private practice, the length of care and the ongoing nature of treatment often impede the appeals process, costing more money the longer that it goes on. And when providers do win appeals for their patients, it’s usually going to cost them far more than it’s worth. 

SME points out that several roadblocks make the appeals process more difficult than necessary. It really comes down to making the determination of whether or not you need to see a corrected claim, whether it is appealable, or whether you need to call the payor to reprocess. Thus, the delay in payment that results. 

According to SME, writing an appeal for each denial is not the right course of action. She says, “When I write an appeal, the information is in the first few sentences. Make sure to include the claim number and the claim details, as well as a comprehensive list of which claims are needed to overturn and pay.” 

Keep information from their claims manual attached for reference, too. All this can expedite the process, SME says. 

Prevention is Key

As mentioned, nine out of 10 insurance denials are preventable. Not just that, but about two-thirds of those can also be appealed successfully. That last third, however, is simply lost revenue that you will never recover. If you add up the revenue lost and the amount spent on appeals for the other two-thirds of the cases, you can see that there’s a high cost that comes with improper management of claims, appeals, and denials. 

Providers that can streamline the approval process and put compliance checks in place will find that there is a reduced risk of denial of coverage. Insurance companies are getting more and more particular about what they require to approve coverage, and if you do not meet their needs to the letter, they could keep you from getting paid for months, or even years, if they ever pay at all. 

Technology can help prevent denials and improve the appeals process, but there needs to be process improvement on a much larger scale if it is going to produce lasting results. Reallocating resources can allow practices to focus more on preventing denials by having a streamlined approval process in place. It’s about getting to the root cause of the denial and then working backward to prevent it from happening at all. 

According to SME, best practices for preventing denials include:

  • Having the right information
  • Coding the claim properly
  • Having adequate documentation to prove the appeal process 

The good news is that as long as documentation is accurate and providers meet the security requirements of coding, they are in compliance and won’t have to worry about that in the appeals process. 

How Can ClinicMind Help?

The ClinicMind EHR/RCM platform is designed to make all aspects of practice management simple, including revenue cycle management and the insurance denials and appeals process. With this software, you can automate workflows, create rules-based actions, and integrate all your strategies in one place to manage your practice more efficiently. We can also assist with billing and compliance issues, ensuring that all documentation is in place and that everything is accurate before submission. 

You can create processes for all your day-to-day activities with the ClinicMind platform, including the denial and appeal management process. Plus, you can streamline information and ensure that everyone in the practice is on the same page with the intuitive interface. 

Conclusion 

Practice management includes a lot of processes and smaller tasks. When it comes to getting paid, many practices are missing out on valuable revenue from insurance claims denials. What’s more, a lot of this can probably be resolved and prevented in the future with the right tools and resources. Private practice managers can utilize practice management software to handle all aspects of insurance, from coding and billing to claims denials and appeals. 

If your practice is struggling with denial fatigue, it might be time to look for a better solution. Often, providers find that once they go looking, they don’t have a system in place for managing this at all, and that can make all the difference. 

 

 

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