Denial Management in Healthcare: What You Need to Know

What is medical billing denial management?

Denial management in medical billing is a process that ensures denied insurance claims are reworked, allowing physicians and healthcare professionals to be reimbursed for the medical services they have provided. According to AAPC, the process involves “investigating, analyzing, resolving, and preventing” denied claims.

The Journal of American Health Information Management Association (AHIMA) believes that the denials management process must begin with a zero-tolerance mindset for preventable denials. Why? Because two-thirds of rejected claims are actually recoverable. The common avoidable mistakes are coding errors, duplicate claims, patient eligibility issues, and insufficient documentation.

Ultimately, denial management’s end goal is the receipt of payment. Your best defense would be to learn where these denials come from, especially denial codes, and how to resolve them.

A closer look at claims denials

A health insurance company or Medicare issues a claim denial after declining a provider’s request to be reimbursed for their services. Most healthcare organizations experience claim denials early in the calendar year due to the implementation of new coding guidelines.

Still, Medical Group Management Association (MGMA) noted that reasons for practices’ most recent denials centered mainly on:

• Payers noting insufficient documentation: Claims lack the necessary supporting information to demonstrate medical necessity, the services were not performed, or the patient’s condition doesn’t align with the billed procedures.
• Patient eligibility or incorrect ID numbers: Claims have invalid characters in the primary ID or use an old ID number.
• Untimely filings: Claims are filed outside the payer’s required days of service.
• Incorrect modifier usage, especially Modifier 25: Remember, modifier 25 should only be applied when the E/M service is truly separate from the usual pre- and post-procedure care and is medically necessary.
• Issues associated with changing to a new EHR, causing registration errors and authorization issues.

Payers use standardized denial reason codes to explain why a claim was denied. These are divided into different categories to represent a type of denial:

Now you can see why a robust front-end denial prevention is vital for healthcare organizations, but how can you achieve this? Below, you can discover practical insights for resolving denied claims.

Data-driven information, ensuring success

Do you know the most common denial reason codes in your practice? Do you notice any patterns in the claims that were denied? This is the first best practice you must implement in your denials management. With data-driven information, you can identify the reasons behind your denied claims and put in place preventative measures to ensure every claim that doesn’t look right isn’t submitted immediately.

MGMA notes that maximizing your revenue cycle management can help you achieve strong claim edits, allowing you to review work queues and organize submissions using HIPAA-accredited tools and technologies.

In the same light, Synapse Revenue Cycle Management steps up as a trusted and reliable partner in medical billing. We have dedicated over 25 years of service to reducing denied claims, as proven by the success of multiple healthcare practices across various specialties, detailed in our Success Stories.

Check out a Sleep Lab’s road to their highest collections due to Synapse.

Our highly skilled team of billers and coding specialists is dedicated to ensuring you receive the rightful payment for every life-saving service you provide. Well-versed in payers’ rules and proficient in the art of medical billing, you can rest easy knowing we value utmost accuracy, efficiency, and transparency.

Manage claims denials with care and expertise – contact Synapse today at (844) 384-7532 or medicalsales@synhs.com.