How to determine if you have a successful denial management process

If you’re contracted with a commercial health insurer, managing claim denials is a task every healthcare office will encounter. Most offices spend a significant amount of money hiring billers or sub-contracting the process to get denials overturned. Yet for most practices, claim denials continue to rise, month over month & year over year. Add to that, the associated costs of time, productivity, and morale – it’s a never-ending cycle that you don’t get ahead of. Which begs the question, how do you actually determine the success of your denial management process?

At its core, a complete denial management system will show denial patterns, offer guidance to avoid replicating denials, enable a practice to decrease their claim denial rate over time, & reduce the time it takes to work denial inventory. Ultimately, the goal is to gain and maintain efficiency. These well-known companies saw exponential growth and profits once they shifted their focus to consistency and efficiency.

  • Using the assembly line strategy, Ford Motors reduced the amount of time it took to build a car by 75%.
  • McDonald’s revamped their original service model to a ready made model & experienced immediate increases in speed of service and volume. This lowered their operational costs, and they passed the savings onto consumers.
  • Amazon grew to a multi-billion dollar company & managed to thrive during the pandemic because of their heavy concentration on automation and standardization.
  • Customers of OptimoRoute, a company that specializes in route optimization software, routinely report double-digit percentage results in costs associated with mileage reduction, lower driver operating costs, and increased delivery capacity.

To address claim denials, most practices resort to hiring more billers, outsourcing denial management, or purchasing the latest tech. However, these solutions are limited, as they generally focus on specific areas within the process, rather than an end-to-end apporach. Here are clear indicators of whether your current denial management process is efficient.

  • Denial rate is below the industry average for denied, rejected, underpaid, & partially paid claims.
  • Age of denials is not older than 5 months from the date of service on the claim
  • Average turnaround time is 30 days or less
  • You can easily identify denials that are eligible for reimbursement
  • Addresses root cause

Note: Denial rates will vary depending on geographic location, health plan, specialty, and services. If you don’t know the comparison for your practice, use the national average, which is 10%-18% for physician practices.

Claim denial management doesn’t require the extensive amounts of time, energy, and resources that most healthcare providers give it. Any good system, regardless of industry, will provide gains in time, efficiency, and productivity. Your denial management process should do the same.