We’ve seen major changes in healthcare finance over the years. Clinical denial information is more detailed, clearer, and timelier than ever before, and yet, denied claims are on the rise.
You may recall our recent post about the rise in clinical denials – a shocking 23% uptick from 2016 to the third quarter of 2020. While the pandemic greatly affected hospitals nationwide, there is a larger problem at play – accountability, or more specifically, a lack of accountability. It’s about more than holding various department heads accountable – it’s about paying more attention to the payer as an essential stakeholder in your hospital’s revenue cycle.
To fight clinical denials more effectively, we suggest the following:
1. Understand payers’ commitments.
Ensure your staff members understand the payers’ commitment to transact business according to various guidelines. These guidelines outline how claims are processed. Guidelines are described in:
State insurance rules and regulations
Summary plan descriptions
Members' policy documents
Contract(s) with the hospital
Tip: Don’t forget! When payers drop the ball, it has a direct effect on your hospital’s balance sheet in real time, every day. So, when the payer erroneously denies a claim, is slow to review an appeal, and/or holds back payment on overturned denials, your balance sheet suffers.
2. Measurement is crucial.
Develop a key metrics system and share that with both payers and internal stakeholders. Metrics that can be measured and quantified include:
Number of denials received, appealed, and upheld
Number of accounts and dollars with appeals and payments outstanding in excess of a specified number of days
Average time between overturn date and date of payment remittance
Tip: Payer report cards often serve as a potent tool for accountability and negotiation.
3. Hold others accountable.
Be sure to communicate a payer’s performance with that payer – it is a vital step to decreasing denials and recovering more revenue. Provide the report cards mentioned above every month, and set a recurring, regular time with your payers to review these report cards.
Tip: The frequency of these meetings should be determined by the results of the report cards, not by the payer’s scheduling convenience.
4. Establish a collaborative relationship with payers.
Find common ground – the shared interest in reducing administrative expenses associated with final adjudication of claims. You can use that common ground to better understand why a payer denied a claim, such as how they interpret terms of their contract with your hospital.
Tip: Track trends in clinical denials and bring this data to your regular meetings.
Clinical denials may be on the rise, but that doesn’t mean your organization has to suffer financially. By leveraging the tools outlined above, and holding payers accountable, you can improve your relationship with payers, communicate more effectively, and ultimately decrease claim denials and increase collections.
Have questions about streamlining your hospital’s processes, recovering lost revenue, or communicating with payers? Contact us today.