Hospitals face a number of challenges negotiating and collecting revenue from claims denied by insurance companies. According to a 2016 report by the American Academy of Family Physicians (AAFP), the average claim denial rate across the healthcare industry is between 5 and 10 percent.
All of this work trying to collect on claims distracts staff from patient care and hinders revenue cycle improvement initiatives. But what are the specific problems encountered? And more importantly, how can automation tools help bridge the gap? Here are 3 common frustrations and how to deal with them:
Frustration #1: Payer Issues
Solution: More Access to Claims Denial Data
Engaging with multiple payers at once can make it difficult to keep claim denial rates closer to the industry average. Trying to decipher payer language when it comes to denials is both tedious and time-consuming for personnel. Each payer response time differs and some have their own unique set of codes. For example, the same claim could be denied by two payers, but each might use a different code or communication method to let healthcare providers know the reason. Automating your claims follow up can make it easier in several ways:
- By retrieving payer-specific codes from payer websites.
- Accessing more data than a 277 response.
- Obtaining insurance information needed without waiting three weeks or more for the 835 details.
Frustration #2: Looking For Ways to Improve Workflow
Solution: Reduce AR Days
Personnel often feel a lot of pressure to reduce time spent collecting claims, however, manually sorting through a plethora of data significantly slows down productivity to successfully manage denials. Healthcare facilities can quickly identify errors on rejected claims so they can be resubmitted for payment. By organizing workflow more effectively, hospitals get paid faster and introduce an influx of cash flow to improve KPIs.
Frustration #3: Manually Managing Large Volumes of Claims Responses
Solution: Retrieve Information Faster
Wading through a spectrum of information including clinical, health insurance, and medical billing data is exhausting. According to a 2016 HIMSS Analytics survey, approximately one third of healthcare providers still use a manual process to manage claim denials, which means that instead of focusing on enhancing patient care, hospital staff are spending increasing amounts of time manually sorting through a mass of data.
Fortunately, automation software can cut down on all of this burdensome (yet necessary) research in several ways:
- By giving teams a head start on rejected claims.
- Populating current claim status information into existing patient accounting system.
- Reduce time spent following up on claims that don’t require action.
Given the complexities around submitting claims and the labor of managing denials, healthcare organizations can directly benefit from automating their denial management process. In doing so, they not only reduce the hassle associated with tracking claims, they also boost staff efficiency. When hospitals are able to reallocate resources to more strategic issues, it’s a win-win for everyone.
Databound Healthcare Solutions automates and streamlines hospital revenue management tasks and business processes to give our customers more efficient operations and increased revenue. Visit our website to learn more.