Insurance claims recovery process

Claims Recovery

A claims recovery process is essential and should incorporate all traditional processes to recover the denied payment, including informal reviews, fair hearings, administrative law judge hearings, appeal council hearings, and federal district court hearings. All levels of appeal have specific timelines,

document requirements, and dollar limits. A cost-benefit analysis should be used to determine the level of resources needed to pursue the denied claim. Use the following tips to assist each facility with claims recovery:

> Establish a department coordinator to direct all communications regarding claims recovery. This team member will ensure an efficient and timely appeal process

> Understand and meet all payer requirements for information submission. Failure to meet these timelines will result in automatic denials

> Designate one contact person to communicate with Medicare, Medicaid, and each commercial insurer

> When an employee specializes in one specific payer, he/she is more likely to be familiar with  payer-specific requirements regarding appeals and information submission

> Focus appeal efforts on denials with the greatest likelihood of being reversed

> Develop a template for appealing denials questioning medical necessity

> Reach out to patient assistance programs for appeals support. Such services can reduce time and effort on the part of the hospital and increase the likelihood of successful appeals

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How to success in denial management

Claims Denial Management

Claims may be denied or underpaid for a variety of reasons.

Common reasons for denial or underpayment may include the following:

> Clerical errors, such as misspellings and transposed numbers

> Questions about medical necessity

> Improper use of diagnosis codes

> Incorrect procedure codes and/or modifiers

> Missing information

> Incorrect billing units

Insurance payers typically have a formal process that permits providers to appeal denied claims or inadequate reimbursement for drugs and/or services. If your claim is denied, you will receive an EOB from your local insurance claims processor explaining the reason(s) for noncoverage. You may resubmit the claim, requesting a redetermination of coverage. 

A well-written appeal letter can be very effective in obtaining appropriate reimbursement for a denied or an underpaid claim. Resubmitted claims should fully document the medical necessity for the patient in question and should include any supplemental information that may not have been included with the original claim.

Review Contracts Comprehensively

When assessing contracts, make sure the hospital can comply with the terms and identify provisions that might generate a high proportion of denials. Pay close attention to terms and limits for appeals. Members of the denial management team should participate in the hospital’s contract review process to ensure that contracts commit the facility to realistic and achievable goals from both contracting entities.

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How to review EOB - AR specialist

Explanation of Benefit (or Remittance Notice) Analysis

> Determine why the claim was denied by analyzing the denial codes, which are usually on the bottom or back of the EOB

> Cross-reference actual reimbursement from the payer to their allowables to determine if the claim was underpaid, paid correctly, or overpaid. Allowables are often published in provider bulletins or in your contract with the payer

> If the payer has changed any of your codes, you may want to go back and review how you’re using those codes and whether they are being used appropriately

> Take care to file appeals within the time constraints of the payer (for Medicare, the limit for appeals is 120 days from the date of initial denial); keep in mind that a payer may require a specific appeal form to be submitted

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Three key fundamentals to effective denial management

The three key fundamentals to effective denial management.

Prevention

Prevention focuses on actions that can be taken upstream in the patient encounter to prevent denials from occurring in the first place. Prevention can be introduced anywhere in the patient encounter such as: Pre-admit/Pre-registration, Scheduling, Admit/Registration and Billing. Our denial management experts ensure that we track such trends and keep the Client informed periodically about improvements/process changes that can be made across functions.

Analysis

The process of analyzing and aggregating similar denials is strategic in denial management. The Denial management team understands that analysis and segregation is a forerunner to follow-up process and hence for us it is an fundamental step in denial management.

Tracking and Trend Management

Besides keeping a track of the denial trend from payers our experts also actively monitor the payment patterns from various payers and set-up a mechanism to alert when a deviation from the normal trend is seen. This is important in understanding the causes of claim denials and enhancing long-term efficiency and drastically reducing lost revenue. 

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What is denial managment soloution

Denial Management Solution 

A good denial management process is not simply about working denials, it is about systematically gathering the data required to eliminate denials. Working denials is like pumping water from your basement when a pipe bursts. Denial management is about fixing the pipe so you no longer need to pump water from the basement.

We also understand that achieving powerful results from denial management requires data, data and more data. Our denial management process reports and measures all claims that are being denied by your payers. With this level of data our Denial Management specialists can fix the issues that are leading to the denials (whether it be issues with the claims or issues with the payers) and stop the torrent of unpaid claims into your medical billing process. Once we do this, then revenues for your practice will increase; probably by 10 to 20 percent.

Over the years we have learn that three elements are typically missing from a practice or medical Provider's denial management process: data, filtering/sorting methodologies and feedback to systematically correct errors. Most practices & practice management systems do not properly track denials - at least not in the form in which they are typically used (i.e., they may have the capability, but only if properly implemented and used). The practice management systems that do track denials typically overwhelm the practice with data that is difficult to utilize for high level denial management. Finally, even if the data is captured and can be properly utilized, most practices do not have a systematic way to get the information back into the billing process in a manner that prevents the denials from occurring again in the future.

Our Denial management Process tracks every claim that has denied and can report this by payer, by CPT, by physician and by diagnosis. This information is presented in a manner that allows fast identification of trends. With this powerful combination in hand, the Practice / Provider of medical service can then utilizes claim rules and edits that are specific enough to dramatically drive up the first pass claim acceptance and stop the flood of denied claims. Our in depth analysis described above also allows payers that are habitual violators of Clean Claim Rules to be identified and pursued. The data and analysis will allow many opportunities for process improvements and revenue enhancement for the practice.

If you implement our powerful Denial Management Solution you can optimize your medical billing and speed up your cash flow. As previously mentioned, our strong denial management solution can increase your collections by 20 percent or more.

As Denial management is a subsection to Accounts Receivables of any medical facility, we religiously follow the below methodology of managing denials from payers. Our solution is focused around the three key fundamentals to effective denial management.

• Prevention

• Analysis

• Tracking and Trend Management

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Denial managment process

Denial Management

Denial Management is a new process methodology whereby patterns and consistencies within denied transactions are analyzed and resolved in a batch process regardless of the account. For example, United Healthcare is denying all supply charges for knee arthroscopies as bundled for our Dr. Smith at his primary location. A denial management methodology will provide all open balances (balances not equal to zero) of accounts receivable that meet these conditions. The billing staff will analyze and resolve these conditions in one action based on a denial reason rather than account by account within a certain queue.

Strengths

• Provides a reporting vehicle to reduce incoming denials within the provider RCM process

• Allows capture of the consistency in transaction denials by provider, payer, procedure, date

and reason

• Improves claim throughput per FTE by three to four times

• Segments claims production issues from A/R issues

• Bypasses embedded, queue-based rules in practice management systems to eliminate

duplication and provide the ability to pull all receivables with all balances for analysis

• Allows view of credit balances within a provider or practice

• Allows for development and implementation of denial adjudication rules to manage

certain conditions

• Easier process to train new staff

• Derives A/R independently from embedded practice management applications

Weaknesses

• Requires integrated payment posting and imaging and indexing of correspondence to fully

optimize the process


Denial Management

Denial Management isolates and eliminates the traditional excuses in accounts receivable for healthcare by forcing action to resolve accounts versus just working accounts. Clear, definable accountability from the denial management process is a critical benefit in addition to the other benefits.

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Task Management versus Denial Management

Accounts Receivable Management: Task Management versus Denial Management

The process of medical accounts receivable (A/R) management is truly a misnomer. In a perfect world, accounts receivable would require nothing more than collection—not management or process. However with growing complexity, payment ambiguity, payer plans, co-pays, co-insurance and other factors that drive up costs in healthcare delivery, the management of the accounts receivable process continues to demand more attention. With an average of 30 percent in denial rates and informed speculation of 15 percent in lost revenues on an annual basis, we must conclude that the management processes currently in place are woefully inadequate and costly. Unfortunately, the national healthcare debate on improvement does not address the A/R  management process (or lack thereof) where significant cost savings could achieved.

Symptoms of an Infirm Process

According to most industry publications, the majority of medical providers collect a portion of their charges within 60 to 70 days from the date of service as compared to five to 10 days required of most retail service providers. Why the difference?

• On average, medical providers have over 60 various contracts with payers for services

rendered that do not typically include the reimbursement amounts.

• Each patient has a unique status within annual healthcare insurance plans as it relates to

eligibility, allowables, network status, coinsurance, and covered services—factors not available to medical providers in advance of the visit with any consistency or clarity from the various payers.

• The allowables and eligibility are reset and, in many cases, change annually. This eliminates

any consistency from payer, procedure and patient over the years.

• A 30 percent denial or reject rate for services rendered would incur significant financial

hardship on the provider.

• The cost of collection approximates 20 percent of the benefit. To justify this cost, each

claim requires an average cycle process of two to four times from provider to payer to resolve the balance owed. If the cycle cost were $5.00 each, the average cost would be from $10.00 - $20.00. With an estimate of $100.00 paid per cycle, the cost would be 10 percent to 20 percent. These figures are substantially higher than the cost of collection for other retail service providers.


The result of these simple factors creates the increasing demand for accounts receivable management systems to clear a path through this murky process. Today, there are two competing methods to manage the process. They are Task Management and Denial Management.

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Key Functions of Denial Management

• Maximize cash flow - Reporting identifies denial causes having the greatest financial impact, thereby accelerating cash flow.

• Identify the root cause of denials - Collecting and interpreting denial patterns to quantify denial causes and their financial impact.

• Support accurate workflow priorities and scheduling for follow up - Collecting information on denial appeals, including status, escalation, correspondence with payers, and the disposition of denial appeals to increase recovery amounts.

• Provide accurate and timely statistics for Management / Clients - Providing management analysis reports and other information to prevent future denials.

• Track, Prioritize & Appeal denials - Generating appeal letters based on federal and state statutes and case citations favoring the medical provider's appeal.

• Avoid out-of-timely filing.

• Analyze the effectiveness of denial resolutions.

• Identify business process improvements to avoid future denials

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Denial claim handling problems and how to solve it

General Problems

• Not appealing denied claims
• Appealing denied claims without making any changes in the claim
• Poor documentation
• Using improper terminology
• Not getting all charges billed

Not Appealing Denied Claims

• All denied claims should be reviewed by the physician and the billing specialist for correctable errors
• Correct the errors and resubmit the claim as a corrected claim

Appealing Denied Claims

Without Making Any Changes

• The definition of insanity is doing the same thing over and over with out changes and expecting different results
• Correct the errors and resubmit as a corrected claim

Poor Documentation

• The documentation should support the level of service coded
• Document what you do and code to the documentation
• Separate the E/M service from the radiology and procedures in the note

Not Getting All Charges Billed

• Audit the transfer of information from “routing slip” to billing program
• Make sure all charges get appropriately billed

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Denial upheld and reversal of denial

6. Denial Upheld
If Prestige Health Choice upholds its initial action and/or  denial, then the member, member’s representative or provider will be notified in writing of the decision as well as any additional appeal rights that are available.

7. Reversal of Denial

If Prestige Health Choice overturns its initial action and/or denial, it will notify the member and provider verbally and in writing. Prestige Health Choice will authorize or provide the disputed services promptly, and as expeditiously as the member’s health condition requires, if the services were not furnished while the appeal was pending and the decision is to reverse a decision to deny, limit, or delay services. Prestige Health Choice also will pay for disputed services, in accordance with state policy and regulations, if the services were furnished while the appeal was pending and the disposition reverses a decision to deny, limit or delay services.

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Important steps involved in denial management - four process .

Plan, Do, Measure, and Adjust Steps of Denial Management  

Plan 
Planning begins with the analysis of denial history using a range of denial cause factors (denial code, payer, physician, procedure, and service). Payers communicate denials through electronic remittance advice (ERAs), or they may be taken off paper remittance advises and entered into the denial management application. Either way, the provider must build planning on the thorough understanding of the denial causes experienced. 

The "plan" step addresses both proactive and reactive procedures. Reactive activities focus on appeal tracking, and are set in motion when a denial occurs. Proactive activities are implemented through business rules that combine monitoring of known denial causes and appropriate prevention workflows or actions that avoid denials in the first place. 

It is important to work with solution providers that have experience integrating the full range of health care data sources so that automated data gathering can be used wherever possible. The health care landscape is constantly changing and providers should look for adaptive denial management applications that quickly react to payer creativity resulting in new types of denials. 

Do 

The whole point of denial management is to execute activities that increase the provider's ability to predict revenue collection. These efforts should focus on improving two operational metrics: overturn rate and denial rate. 

Overturn rate improvement is realized through better reactive processes that define and monitor milestones and due dates, as well as enable more efficient interdepartmental collaboration to generate information needed to respond to both clinical and technical denials. This is accomplished by automating manual work to reduce delays, errors, and oversights and by not letting appeal tasks fall through the cracks. Providers should seek out solutions that deliver prioritized task lists with highly flexible prioritization, distribution, and security features. 

Denial rate improvement comes from proactive processes that detect patient encounter problems during pre-certification, concurrent reviews, coding, and so on. The denial management system needs to accurately detect the condition and apply predetermined rules in a timely manner to correct it. The measurement step (see below) is critical to the timeliness of proactive management. Health care providers should select solutions built on the latest Web-based architecture in order to benefit from rapid detection, collaboration, and prevention activities that affect denial rate in a positive manner. 

Measure 

Measure refers to "in-process" measurements that capture, compare, and document the   characteristics of a specific patient encounter (including payment) against known "at-risk" revenue cycle conditions. These characteristics trigger and execute workflows to provide unique management attention or extraordinary processing. 

Measurement effectiveness depends not only on detecting conditions of interest, but also on delivering analytic functionality that is targeted at specific business needs via key performance indicators, snapshots, dynamic reporting, and real-time analytics. Providers should make sure to engage solution vendors that use current information technologies so that automation can be used, when appropriate, and collaboration functionality can be fully leveraged. 

Adjust 

Adjustments should be thought of as fine-tuning the plan, and not the execution of predetermined workflows. Adjustments to the plan should be based on performance against established metrics, and the provider's evolving understanding of controllable factors that drive predicted revenue collection. 
In order to perform the Plan, Do, Measure, and Adjust steps efficiently and realize maximum benefit from an active denial management program, providers should look for the following solution features from their denial management software provider:

o    Business intelligence that includes decision support, query and reporting, OLAP, statistical analysis, forecasting, and data mining. 
o    Workflow and milestone configuration ease through icon-driven graphic user interfaces, full language statements, and automatic condition recognition. 
o    Rules libraries that help the user create rules once for multiple deployments that prevent, cause, or suggest things to happen.

Conclusion 

Measuring actual health care revenue collection against actively managed revenue prediction is a powerful metric that stands to help providers achieve necessary margins to sustain their critical health care missions. Fundamental to useful revenue collection prediction is thorough understanding and management of reimbursement contracts, payer procedures, and claim denials. 

Denial management is the last mile in the health care revenue cycle where end-to-end patient encounters include all administrative and clinical functions that lead up to capture and presentation of claims for payment. Denials represent the state of highest financial exposure, since all costs have been incurred and payment is still outstanding. 

Providers should actively introduce both reactive and proactive processes to improve the overturn and denial rates, respectively, and meet predicted revenue collection. Providers can achieve the highest active management capability by selecting a denial management application built on the latest technologies, allowing them to adapt to payer denial strategies in increasingly shorter time frames and to gauge their performance using powerful predicted revenue collection metrics.

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How to avoid claim rejection in medical billing

When your medical billing claims get rejected, one claim can put your staff behind on everything they are supposed to be doing.  The patient’s folder will have to be pulled, the notes will have to be re-read and researched, the claim will have to be compiled again and the coding will need to be double checked again to make sure you are using the latest codings and modifiers for the claim. In some cases the carrier will need to be contacted which is more time lost from servicing your practice and the claim will have to be submitted once again and the will take more time away from your day to day servicing of patients. 

If you’re ready to get rid of the hassles that a rejected claim or multiple claims can cause, it might be time to consider outsourcing your medical billing claims to a third party partner that can get your claims submitted, double check your billing and get your reimbursements.

The beautiful thing about outsourcing your medical billing claims is the average return rate due to errors is less than 1%. Plus you’ll see up to 25% of your reimbursements increased due to your claims being handled in an efficient manner. Best of all, your staff will be free to help you run your practice instead of chasing paperwork for medical billing claims.

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Why Don't Providers Collect What They Expect? - In reality

Why Don't Providers Collect What They Expect?

Health care's patient, provider, and payer structure makes accurately predicting revenue collection a particularly difficult challenge. While all three stakeholder groups may be well intended, they simply do not value health care services similarly because of the differences in their individual needs, wants, and approaches to risk management.


Governance of this marketplace is achieved through a large volume of legislated regulations and procedures, and many providers surprisingly jeopardize revenue collection by not understanding the full range of reimbursement rules. Current budget and demographic trends will only increase pressure on the entire health care delivery system into the foreseeable future.

Revenue predictability requires that individual lines of business and their unique revenue streams be understood and managed. Providers should fully recognize patient encounters as the "activities" that drive internal service, cost, and outcome processes. Predicting and actively managing what should be collected for individual encounters should take place before claim denials occur, not after.

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Insurance reimbursement rule - reimbursement contract, payer procedures

Understand Reimbursement Rules  

Each health care stakeholder seeks its best service, cost, and outcome solution on a resource scarce playing field. Accordingly, health care's critical role in our modern and aging society has led to the development and constant updating of a huge body of both legislated and interpreted rules. Clearly, each group should start protecting its long-term interests by actively engaging in understanding, implementing, and contributing to the development of these rules. For providers to ensure that they collect what they expect, they need a thorough understanding of reimbursement contracts, payer procedures, and claims denials, and an active management approach to comparing predicted revenue collection to actual collection. 

In order to predict revenue collection, providers must establish necessary expertise in each of the following areas:

Reimbursement Contract — Providers have to understand how each reimbursement contract handles varied billing requirements, coverage limitations, facility-specific needs, start and end dates, co-pays, per diem rates, and G/L posting references. 

Payer Procedures — Providers have to be intimately familiar with payer procedures. They need to require payers to provide in-service training to provider staff to ensure that they thoroughly understand the payer's procedures. They should insist on receiving initial in-service training for all staff and regular refresher training to bring new staff up to speed on updates and procedure changes. Payer educational materials should be saved for reference. Providers should also develop and systematically maintain a library of provider manuals. Provider staff should be provided with all the tools and information they need to work under the payer procedures, including all payer addresses and phone numbers required for notifications, authorizations, claims, and collection follow-up. 

Claim Denials — Philosophy and technology should be combined to manage claim denials and achieve predicted revenue collection. Understanding and documenting reimbursement contracts and payer procedures is largely dependent on providers negotiating effective contracts and training their personnel on how to follow the rules. The range of reimbursement and compliance rules is great, but there is no substitute for understanding. 

Reimbursement claim denials are variances to the patient encounter revenue-collection plan. In order to reduce these variances, providers need to follow an active and systematic approach: analyzing and prioritizing denial causes; establishing a plan; assigning responsibility; tracking appeal processes according to contracts and payer procedures; and introducing business rules that identify and correct processing problems upstream in patient encounters, thereby preventing denials in the first place. 

The potential to use technology is greatest in the area of claim denial management. When providers add automated and collaborative goal setting, business planning, and accountability to the passive measurement of revenue collection, they create forward-looking and inherently active management that increases revenue predictability.

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what is denial management and plan or steps of denial management

Denial mangement is not a one-time event. It should be iterative and continuous.

Revenue collection at both the patient encounter and aggregate level should be established as key performance indicators for the entire organization, as opposed to individual departments only. After all, the modern health care cycle must be managed start to finish and include all administrative and clinical functions that lead to the presentation of claims for payment if revenue collection goals are to be met. 

Plan, Do, Measure, and Adjust Steps of Denial Management 

Aligning actual revenue collection with predicted revenue cannot be a one-time event. It needs to be an iterative and continuous process with the ultimate goal of guiding the provider's clinical and business course in the desired direction to support its mission. 

It is safe to say that all providers are already involved in revenue prediction through the selection of revenue write-off percentages for specific accounting periods. But this is a clear case of passive management; it does little to explain variances and tends to "institutionalize" average historical write-off percentages. 

Denial management technology introduces active management into the process of predicting revenue collection in several ways. Predicting revenues should be a continuous process, and this paper looks at effective steps to implement a focused denial management initiative.

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