Have you noticed a recent rise in reimbursement claims denials? Denied claims are increasing across the U.S., creating a frustrating and precarious situation for regional hospitals.
In this article, we’ll examine why denials are rising and what you can do about it. Many regional hospitals are now using innovative denial management strategies to successfully claim as much revenue as possible.
Patients Need Care From Regional Hospitals
The U.S. is home to more than 8,400 regional hospitals including approximately 1,400 federally qualified health centers (FQHCs) serving more than 15,000 locations across the country. Unlike big hospitals in major metropolitan areas, regional hospitals face a set of particularly challenging circumstances.
Your hospital may be one of the few local healthcare options for a geographically large and diverse service area. The news has been full of stories about rural hospitals closing, so many of your patients are desperate for care and may be traveling long distances.
Many rural and regional hospitals have high utilization rates for services like ER visits and emergency surgical care. Over a ten-year period, the Journal of the American Medical Association (JAMA) found rural emergency department visits nearly doubled from 16.7 million to 28.4 million. Medicaid-beneficiary visits at these hospitals grew from 4.4 million to 9.7 million.
A high patient load strains your resources and puts pressure on your staff. Many regional hospitals struggle to manage such a complex and unrelenting workload. As a result, a revenue management issue like a high rate of denied claims will often worsen.
Why is the Rate of Denials Rising?
A major healthcare organization studied the top reasons for claim denials according to 200 top healthcare executives. The six main reasons were:
- Insufficient data to understand claim denials
- Lack of process automation
- Lack of training
- Lack of in-house expertise
- Out-of-date technology
- Staffing shortages
The overall rate of denied claims from insurers currently stands at about 10% to 20% of all claims received. Medicare Advantage claims denial rates tend to be slightly higher than other payer categories.
A Kaiser Family Foundation (KFF) study of claims denials and appeals in the Affordable Care Act (ACA) marketplace found denial rates varied more widely than previously thought. The KFF study found denial rates ranging from 2% to 49% due to many factors including:
- Excluded services
- Lack of preauthorizations/referrals
- Medical necessity reasons
- Other reasons
Interestingly, “other reasons” accounted for 77% of all denials. This may indicate that errors in the claims submission process play a major role in high denial rates. Additionally, U.S. healthcare payers have been tightening their rules and are quicker than ever to deny claims.
It’s also notable that the KFF study found appeals of denied claims are surprisingly rare, with fewer than 1% of denied claims being appealed. After appeals, 59% of denials were upheld but the rest were later approved.
Why Appeals and Denials Present Such a Challenge
Denials are a daily obstacle in claiming valuable healthcare reimbursements. Coverage provider rules are ever-changing, as are U.S. healthcare laws. It’s a lot to manage.
Your regional hospital faces a challenging combination of lack of time, lack of labor, a high caseload, and a need for expertise in the latest claims submission procedures. Depending on the size of your hospital, you may have a limited number of people who have the experience to manage your claims.
Even if you have the right team on the task, they may be overwhelmed with the daily flow of submissions, appeals, denials, and more. There’s little time for more in-depth activities like determining what’s going wrong with your revenue cycle.
It takes talent and time to identify missed opportunities and potential new sources of revenue. You may need outside help to conduct a strategic analysis to address a rising denial rate.
Claims Management Expertise Makes All the Difference
Managing claims goes far beyond just sending off your claims and hoping for reimbursement. There are many other activities involved with preparing your submissions and conducting proper follow-through. Does your hospital’s staff have experience with all of the following tasks?
Claims Submission
Old and outdated procedures will slow down your process. Hospital staff should be using the right procedures for both paper and electronic claims submissions. Accuracy and completeness are the keys to preventing delays and denials.
Clarify Terms
Appeal? Denial? Rejection? Resubmission? It often helps to review the basics with your staff and ensure they understand all common terms related to claims processing. Clarify what constitutes a rejection vs. a denial and which claims are still eligible for resubmission. Misunderstandings on this front can be costly for your hospital, especially if you have a huge backlog of potentially valuable claims sitting unaddressed.
Coding
Correct medical coding is an important aspect of preparing claims for eventual payment. Your staff may need training on systems like CPT, HCPCS, and ICD-10, plus education on the latest coding rules, modifiers, and requirements for proper documentation.
Denial Procedures
What currently happens when you receive denials? Educate your staff about the steps to take including addressing coding problems, following up with payers, and analyzing the process to prevent future issues.
Eligibility and Verification
Be proactive about ensuring pre-authorizations are in place before procedures. Train your employees to verify details like the patient’s benefits and coverages before getting too far into the process. Prevent wasted work and denials later.
Payer Details
Otherwise knowledgeable hospital employees may have little to no understanding of the various payer reimbursement policies. Help them learn what’s acceptable to certain payers and which types of problems typically result in approved vs. denied claims.
System Optimization
A revenue cycle management (RCM) partner can help you identify issues with your current process, resolve them, and optimize your revenue flow. The right partner will minimize errors while seeking every opportunity to maximize your revenue.
Defeat Denials and Secure More Revenue With Altruis
You don’t have to give up on pursuing payment from denied claims. Altruis uses a tested and effective process for avoiding denials, making appeals, and turning these claims into a steady source of revenue. Our services make the claims process much easier and faster, relieving stress and helping your hospital run more smoothly.
We can help you keep your focus on providing much-needed patient care in your region. Arrange a call with Altruis to learn more.
