• AHAP Inc.

Denial Prevention

Today, with efforts to control debt and decrease the costs of healthcare, care delivery systems must operate both efficiently and effectively. Hospitals and healthcare providers are seeking the answer to how they can better manage denials or avoid them altogether. Health systems continue to face major financial challenges with claim denials as the main contributor.


As the volume of denials steadily increases, providers need a proactive approach to manage and prevent denials rather than accepting them and writing them off. According to the Advisory Board, about two-thirds of denials are recoverable and 90 percent are preventable. Understanding the root causes of denials is essential to effective management and creating a proactive approach to denial prevention.


There are several core reasons an organization may see increased medical necessity denials:

  1. Incorrect Inpatient vs. Outpatient status assignment

  2. Documentation lacking medical necessity

  3. Authorization issues or untimely clinical updates


Most medical necessity denials that are justified can be remedied through a concurrent review. Having an experience Appeal & Denial Nurse Auditor is essential to every organization. When possible, you should ensure that the completion of the review is timely.


Build a Dedicated Denials Team


An effective denial prevention strategy includes a combination of identifying root causes and building a dedicated denials team to do research, write appeals, and resubmit claims. A denials specialist team should take complete ownership of correcting each case regardless of where the denial occurred or the root cause. This level of responsibility requires a high level of commitment and expertise. Selecting the right team members is essential.


After evaluating the root causes for your denials, and developing a process improvement plan, make sure to communicate them to each department leader in your organization.

Appeal medical necessity denials in a timely manner:


For medical necessity denials received after discharge, organizations should identify an appeal process that allows for a quick turnaround time in sending appeal letters.


With an estimated 65% of denied claims never being re-submitted, an organization that chooses not to act can leave an inordinate amount of money on the table.


Provide Ongoing Training and Education


Proper training and education for professionals is critical. To avoid common mistakes that cause denials, clinical auditors must have resources on the latest updates. Knowledge of payer guidelines is important as well understanding payer mix and knowing where to find payer operational terms.


Identify Top Denials and Work to Prevent Them


One of the best ways to manage denials is to avoid them in the first place. Best practice is to identify the top denials and work toward prevention. Having a clinical auditor review the case before sending it to the payer. As healthcare moves toward value-based reimbursement, providers must do everything possible to determine why errors occur and how to prevent them. Persistence in preventing denials pays off.

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