4 Steps to Prevent Unnecessary Claims Denials

Step 2: Manage

Receiving a denial for a service unavoidably kicks off a series of tasks. Create a standard denials resolution workflow. Once the denial is identified, whether manually or automatically, an action plan to resolve and refile the claim for reprocessing must be executed. The following actions focus the work of denial management:

1. Route the denial: Instead of printing, copying and filing each denied transaction, use automation to route denied claims directly into work lists. These lists should reflect the natural patterns of the revenue cycle. For example, route all coding-related denials to coders or providers. Sending a coding-related denial to the scheduler or front desk staff will only slow the process of handling the denial.
2. Sort the work: Whether specific staff work denials as a component of their job or as their exclusive focus, make sure they have the technology and training to effectively do so. A structured, organized workflow—whether automated or manual—is critical. Staff can streamline the work by working denials based on category. For example, within an insurer category, work all denials related to a credentialing issue for a particular provider.
3. Create a workflow: Create a standard workflow for each type of denial. Don’t attack the denial problem without a strategy for how to review and respond. Staff will comply with the process better if there is a carefully designed and monitored protocol. Identify your practice’s most common reasons for denials, such as medical necessity. Record the most frequent denial codes associated with that denial. For example, the diagnosis is inconsistent with the procedure. Develop a step-by-step action plan for staff to follow when managing one of those denials. Include even the most basic steps—check online claims status, then review the date of service and office note. With standard protocols, practices can achieve better performance throughout the denial management process. Hold staff accountable for their denial management tasks and accomplishments.
4. Use a checklist: Effective denial management relies on many small actions carried out consistently and avoiding certain common mistakes that cause denials to linger and, in some cases, end up as uncollectable bad debt.
   1. Don’t delay. After a problem is identified, begin working on a resolution immediately.
   2. Avoid automatic rebilling because this tends to produce a significant number of duplicate claims and duplicate denials.
   3. Pick your battles. If research reveals the claim was filed incorrectly, correct it and resubmit it.
   4. Build the case for an appeal or resubmission by learning the payer’s requirements for resubmitting or appealing claims that may have been denied incorrectly.

Step 3: Monitor

The development of an effective denial management program takes more than just assigning a staff member to work denials and resubmit claims; the process must be monitored. To monitor the work of denial management, first maintain a log of denials by date received, type of denial and date appealed to ensure the denial management processes are effective. Second, audit the work of staff by selecting a sample of resubmissions and/or appeals. Evaluate the steps taken for the appeal, the timeliness of appeal and the strength of the case submitted to the payer. Third, make sure staff have the tools, technology and resources to get the job done.

Monitoring also must be conducted at the payer level to gain a better understanding of each payer’s claim denial system. While unpleasant to receive, claim denials, particularly the information about the type, number and source of the denial, are invaluable business data for a practice.