With an increase in denials over the past years, it is unavoidable that your facility will receive reimbursement denials. Clinical denials are a fact of life for providers. While some are valid, others provide opportunities to follow up with providers to ultimately recover lost revenue. There are many reasons for Denials. Most charging errors occur in the ED, Surgery and Observation stays.
Common reasons for Denials
· Denials based on medical necessity, length of stay or level of care.
· Denial due to non-covered services.
· Documentation did not support the level of care charged
· Denials due to Inappropriate care
· Appropriate care but not supported in the medical record
To manage and prevent future denials providers need to find out why denials are occurring in the first place. Providers cannot prevent denials if they do not know what is being denied.
Effective Denial Management
Effectively managing your claim denials is key to ensuring maximize claims reimbursement revenue and prevent denials.
The importance of denial management cannot be ignored in the healthcare industry, the way any healthcare organization manages denials has a major impact on its financial stability.
How to improve denial management:
1. The need to understand why claims were denied: Identifying the major reasons for denials, is the first process to maximize your revenue collections and prevent future claims from getting denied.
2. Complete claim denials within a week: Creating a strong workflow for you denied claims is paramount to establishing a successful denial strategy. When you receive a denial from an insurance company, you should have a process in place to ensure that denial will be corrected within a week.
3. Create a tracking & reporting process: Establishing a denial reporting report that can track your claims as they enter and leave your system allows your organization to measure your performance over time especially as many insurance companies set limits on how long a hospital or medical practice has to appeal a denial.
4. Track your progress and appeals: Keeping track of your appeals and results. Identifying the types of denials that are most common to your organization is also a crucial component of establishing an effective denial management process. After all, the goal is improving the efficiency of your organization.
Defending Hospital Charges
If your facility or medical practice has received an insurance company’s notice Letter of Intent (LOI) indicating that it will audit the medical and billing records regarding certain patients or Denial Letter, there are very important steps to take to protect your interests.
The scope of medical audit is verifying that charges on the detailed itemized hospital bill are accurate and that charges represent services rendered to the patient and are ordered by physician and are based upon standard hospital practices and/or nursing protocols and procedures.
Third Party Payer Defense Audit
When it comes to “Third Parry Payer Defense Audit” providers must create an outline billing audit guideline for third party payer auditors to ensure External Auditors observe certain procedures to facilitate orderly review.
Scope of Your Audit Policy needs to be limited to verifying charges of service rendered and supplies provided are accurate.
Providers must conduct a pre-audit prior to defending the external audit. They need to audit both over and under charges. In conducting clinical audit in defense of hospital charges, nurse auditor needs to ensure consistency between medical records documentation and billing statements on patient accounts.