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.
To find out if your billing department or a current billing company is deploying a Revenue Cycle Denial Management System on your behalf ask them: (1) What is their Revenue Cycle Denial Management strategy; (2) What process do they use to methodically measure it and (3) what are the quantifiable results of it. If you do not receive rapid, concise answers with clear metrics then there is not a proper denial management system in place for your medical billing.
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.
Payers that are chronic violators are pursued to resolve how and when they intend to process and pay outstanding claims. If the issues persist, there may be grounds to charge penalties stipulated by the Clean Claim Law. Only by quantifying and analyzing the problem can a medical billing team discover how to improve on the process.
If you implement a powerful denial management system you can optimize your medical billing and speed up your cash flow. As previously mentioned, a strong denial management system can increase your collections by 20 percent or more.
Copyright 2008 by Carl Mays II - 15478
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.
To find out if your billing department or a current billing company is deploying a Revenue Cycle Denial Management System on your behalf ask them: (1) What is their Revenue Cycle Denial Management strategy; (2) What process do they use to methodically measure it and (3) what are the quantifiable results of it. If you do not receive rapid, concise answers with clear metrics then there is not a proper denial management system in place for your medical billing.
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.
Payers that are chronic violators are pursued to resolve how and when they intend to process and pay outstanding claims. If the issues persist, there may be grounds to charge penalties stipulated by the Clean Claim Law. Only by quantifying and analyzing the problem can a medical billing team discover how to improve on the process.
If you implement a powerful denial management system you can optimize your medical billing and speed up your cash flow. As previously mentioned, a strong denial management system can increase your collections by 20 percent or more.
Copyright 2008 by Carl Mays II - 15478
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 assisting clients with Medical Billing problems and practice management solutions for more than 10 years. You can learn more about medical billing problems and solutions by searching for the rest of Carl's articles on medical billing.
