How to reduce claim denials

How to reduce claim denials

Claim denials interrupt practice cash flow, take up valuable staff time and cause frustration for patients. Because this is such a common problem in practices, we reached out to an expert, Sarah J. Holt, PhD, FACMPE, to find out how to reduce claim denials. Sarah is a practice management consultant, founder of Holt Medical Practice Solutions, part owner of a medical billing service and the author of Medical Office Billing: A Self-Study Training Guide (published by MGMA). She also teaches health policy, practice management and reimbursement to master’s level students.

“The AMA tells us that 20% of all claims are denied. The insurance industry says that clean claims are denied only 2-3% of the time. So what we strive for are clean claims,” says Sarah, who points out that there are three phases involved in generating a clean claim: pre-visit, visit and post-visit. Even before the visit, however, there are important issues related to clean claims that must be addressed. “Negotiate your contracts well and make sure that your physicians are credentialed properly so that they get paid when they work,” says Sarah.

Pre-visit: “A clean claim starts at the front desk, but too often the front desk staff doesn’t understand their role in the revenue cycle,” says Sarah. “The revenue cycle is everybody’s job and it all starts before the patient arrives.”

Sarah recommends looking carefully at the CMS claim form to ensure that all necessary information is gathered from patients. And, she says, copy a patient’s insurance card at every visit. “If you go to Ruby Tuesday for lunch three days in a row, you’ll give them your credit card every time,” says Sarah. That’s a great analogy, because just as people change which credit card they use from time to time, patients may change jobs, get new insurance, or lose insurance from visit to visit. Be sure, too, to get information release forms signed by patients and give them a copy of your payment policy so they understand that ultimately they are responsible for charges incurred.

Once you have all of the patient information you need, make sure it’s entered into the system accurately. One transposed number is all it takes for a claim to be kicked back. “Information should be double checked by a second person on the day of the visit,” says Sarah.

Visit: “The visit is when you create expectations with patients,” says Sarah. She recommends collecting co-insurance payments at the time of service and establishing the fact that patients are responsible for any balance due after their insurance pays or for the entire balance if their insurance does not pay.

Correct diagnosis and CPT codes are essential for clean claims, so take steps to ensure that everyone in the office involved in the revenue cycle is trained and up to date in this important area. “Codes must be accurate,” says Sarah. “Educate your staff, and remember that the front desk staff needs to be equally educated.”

Timeliness in several areas is important when it comes to the patient visit. “Make sure that the clinic portions of visits are dictated immediately,” says Sarah. “The sooner a claim is filed, the more apt is it to be paid, so you’ve got to create the expectation with physicians that claims must be filed daily. Don’t let things sit,” she says.

Post-visit: “The most important thing about the billing process is assigning duties and holding people accountable for what they’ve been assigned,” says Sarah. Having the right people in the right jobs is also a factor. According to Sarah, the ideal billing staff employee is self-reliant, responsible, reliable and a good communicator. “When you give them work to do, they should act with autonomy,” says Sarah, who is also a fan of cross-training. “Rather than have one person do all the work for one doctor or one insurance, they should be cross-trained,” she says. “Divide the work up so that everyone is getting experience across the board.”

The billing process should be streamlined so that clean claims get paid with as little hands-on staff time as possible. “Automate everything you can,” says Sarah. Doing so frees up your highly trained staff to deal with the few claims that are denied and to communicate with patients about the status of their medical bills-something your computer system cannot do.

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