Denial Management

What is Denial Management?

Denial Management refers to the art and science of denying. It is the systematic procedure of doing root cause analysis of why every claim is denied, doing root cause analysis to uncover a pattern by at least one or more insurers, researching current claims to find an emerging trend by at least one or more insurers, re-engineering or redesigning the entire process to avoid or lessen the likelihood of future claims, and then acting to mitigate or eliminate the adverse impact on operations. The goal is to minimize the amount of money paid out in claims while maximizing the chance for future claims. Denial Management also involves reducing the amount of money that is lost by replaying the same claim over again. It aims to close the gap between the anticipated costs and actual costs, to minimize the time and money spent on claim processing.

Denial Management

While all businesses experience loss from time to time, some suffer more than others. Some businesses are extremely exposed to claims denials, and suffer a great deal of loss each year. Other businesses rarely experience claim denials, but may be subject to a high number of rejected claims. Whichever type of business you belong to, there are steps you can take to ensure that your company maintains healthy levels of claim denials while avoiding a large amount of loss due to rejected claims.

Determining Denial Management Rates

One of the many considerations in determining Denial Management Rates is the total dollar amount being spent on denying claims. The higher the Denial Management Rate, the more it will cost your company to maintain its competitive advantage in the medical billing and claim denials industry. Most physician’s practices set their yearly or monthly rates based on their yearly and monthly revenues. To calculate the annual denial rate, an accountant can usually make a reasonable estimate based on records of past annual denials and rejected claims. This allows the CPA to provide the medical billing and claim management firm with an accurate numerical value for their client’s annual fee.

Another way to keep your company at the top of the Denial Management Rate list is to make sure your physician’s practices have a good policy in place to prevent potential claims denials. Policies often outline specific reasons why a patient may be denied, as well as steps that a physician can take to try and prevent them from happening. New policies often outline prevention measures that are specially tailored to new-age patients, women, or minority groups. New policies can also outline the steps that a physician must take to ensure a claim is approved before the policy takes effect.

The number one goal of most insurance companies is to avoid lost revenue. To achieve this, insurance companies have implemented a variety of methods to determine the costs of loss prevention efforts. While physicians have always been rated according to their level of experience for potential claim denials, it is not always easy to keep track of potential Denial Management Rate cuts. The best way to avoid Denial Management Rate cuts is to implement policies that are proactive in tracking and reducing claims. These types of policies can include new screening and reporting procedures that are designed to catch older patients who have already had their claims rejected.

Sometimes the most important thing you can do to avoid being rated lower than your peers is to make sure your physician’s practices comply with all of the policies and procedures set forth by your plan. You want to have the best possible chance of appealing a denial. Your appeal can come from many different angles if you are denied claim denials. If you feel the denial was unjust, you can appeal the rate through the appeals process provided by your plan. If you feel your physician practice made a mistake in the way they checked you out or they otherwise violated the terms of your plan, you can appeal through the corrective action phase of your plan. You can also appeal through the notice phase if you feel the notice was inadequate in describing the corrective action you need to take.

Medical Necessity Claim Phase

You will be able to argue your position regarding the proper diagnosis, treatment, and other aspects of your medical necessity. Many physicians do not receive adequate training or do not fully understand how to read a patient’s medical history before treating them. It is at this point that patient misdiagnosis and other actions such as under-utilization will occur. If you are denied the claim for medical necessity, you can argue this point on appeal until the denial is overturned.

If you think you may be a candidate for Denial Management, you should ask your plan administrator or the Medicare Part B provider about the possibility of prior authorization. If it is possible, request to be allowed to pay the higher Medicare co-payments for non-core services performed during your hospital stay. If your provider is unable to give you information regarding prior authorization, you may also want to call the Medicare enrollment call center to find out if they offer this type of service. Once you find out if you qualify for prior authorization, you should submit your application and wait for an answer.