As COVID-19 continues to take center stage for many healthcare and revenue cycle professionals, the daily task of rework related to denials continues to burden daily work processes as well as impact the financial viability of healthcare organizations across the country.
We are several months into the COVID-19 pandemic and six months of 2020 are now in the rearview mirror. HIM and revenue cycle professionals must continue to ensure that clean claims are going out the door and that denials are dealt with in a timely fashion. During the first half of the year, healthcare providers submitted thousands of claims for reimbursement. Many of those claims may get denied because of the new ICD-10 codes that went into effect on April 1st, the waivers of payers, ever-changing guidance regarding telehealth, or the lack of clinical documentation to provide validation and support for underlying conditions that are associated with COVID-19.
Denials are inevitable and coming at facilities faster than ever. So what can you do to reduce the financial implications of these denials?
Start at the Beginning
One of the first places that HIM professionals should consider when focusing on their denials prevention strategy is physician offices. More than ever before, healthcare organizations are dependent on the documentation that starts in the physician’s office. Physician offices receive denials, just like healthcare organizations. However, in many cases, the physician office does not have the resources, processes, or technology to efficiently address denials. Therefore, many denied claims are never addressed.
Given the current landscape of the healthcare industry, it is imperative that physician offices and healthcare organizations collect every dollar possible to ensure financial viability and sustainability. How are denials handled in your physician offices today? Is there a backlog or opportunity that should be focused on?
Like it or not, healthcare organizations must fight for every dollar that is owed to them daily. The denials battle in the physician office are no exception. The numbers speak for themselves.
- 5%-10% is the average denial rate for most physician offices
- $25 is the cost on average for each claim that must be reworked for resubmission
- 90% of denials are avoidable
Do the Math
Here’s a quick example of how costly denials can be in a small practice with two providers.
- The providers submit 2,000 claims per month and have an 8% denials rate.
- The number of accounts denied monthly is 160.
- If each denied claim is $100 that equals $16k per month or $192k annualized.
But don’t forget about the rework – that adds $25 per claim on top of the annualized number….and the denials journey is just starting.
Addressing Physician Office Denials is a Balancing Act
HIM professionals must strive to achieve balance between resources, processes, and technology. The right resources are the foundation of a successful denials program. However, identifying and maintaining those resources may be challenging. HIM professionals should take time to reflect on initiatives and processes that have worked and those that have not and implement changes to processes that directly prevent denials or impact the appeal process.
Consider a Vendor Partner
In a physician office setting, partnering with a vendor that is flexible and has connectivity to payers is a win-win for healthcare organizations. A strong vendor partner like Ciox will have established processes to effectively manage denials, including right-sized technology solutions that fully support providers without requiring an extraordinary spend on technology that is not fully utilized.
Prepare for the Surge
Establishing a solid foundation for your physician office denials program is going to be critical in dealing with the increase in denials the industry is expecting. Here are some tips to help prepare for the anticipated surge:
- Get leadership engaged by talking potential dollars and current revenue leakage
- Identify current top denials and source(s) and form a task force focused on remediating these denials
- Focus on clinical denials and those denial letters that want “clinical evidence”
- Divide and conquer – divide the work between internal teams and a vendor partner; for example, one group can focus on rework, another on prevention, and your vendor can craft appeals letters and work older denials that are past timely filing
In addition to establishing the processes that will optimize your denials program, you need to establish the right frame of mind across your organization … from provider sites to hospitals to the enterprise revenue cycle teams.
- Make the word “Denials” a common term for your organization, much like “DNFC/DNFB”
- Make “Appeal” your motto to attempt to recoup any lost dollars
- Educate, Educate, Educate and Communicate, Communicate, Communicate
HIM professionals have a great opportunity to work with their organizations to mitigate a billing crisis as well as ensure a solid foundation for the months and years to come. Why not take the crisis created by this pandemic and turn it into an opportunity to create a better way to prevent future denials? Now is a good time to consider taking the first steps to building a Clinically Integrated Revenue Cycle (CIRC) that will bring together clinical and financial pathways rather than maintaining the traditional siloed approach. Building a better denials programs in your physician offices is a great place to start!