Revenue Cycle Decoded's Question of the Week: Common Mistakes in Denials Management

What are the most common mistakes medical practice managers make in denials management and prevention?
Managing and preventing denials is critical for medical practices, but practice managers often make mistakes that can result in lost revenue and decreased efficiency. Here are the most common mistakes to avoid: 

Failing to identify the root cause of denials

When you don't get to the root of the problem, you will not be able to solve the problem long-term.  You may not identify common issues that could be prevented before the claim is submitted.  You may also fail to identify non-compliance with payer contracts and regulatory contracts which could eventually lead to penalties and legal issues. 

Insufficient staff training and education
We all know that time is at a premium and staff turnover can be high.  Failing to invest in adequate and ongoing staff training and education, especially with front office staff, can lead to denials and loss of revenue through inaccuracies in information capture, lack of knowledge of payor policies and authorization requirements, missing and invalid information, and poor revenue cycle processes. 

Not appealing denials within the required timeframe
If appeals are not filed within the timeframe specified by the payer, the denial becomes final, and the medical practice forfeits payment for the services provided. 

Lack of communication and collaboration among team members
When front office, back office, clinicians and providers in a medical practice don't communicate and collaborate on denials, management and prevention efforts can be hampered by incomplete or inaccurate information, missed deadlines, duplication of efforts, and inefficient processes.  This can even lead to reduced quality of care as the patient's treatment plan may be impacted by delayed or denied payments.  

Failure to stay up-to-date on changes in healthcare regulations and policies

Missing out on important changes in healthcare regulations and policies such as revised codes and updated medical necessity requirements will lead to billing error, delays in payment, and potential compliance issues. 

Inadequate technology and tools
Many practice managers continue to rely on the good old spreadsheet without realizing that there is a wealth of tools, technology, and automation available to help with denials management and prevention.  Practice managers who fail to take advantage of technology and automation increase  the administrative burden, resulting in inaccurate or incomplete data, missed deadlines, inefficient processes, and reduced productivity. 

Inefficient or ineffective eligibility verification processes
One of the most important front office duties is insurance eligibility and benefits verification.  When this process is inefficient, ineffective, or non-existent, the practice will see increased denials due to incorrect or incomplete patient information, coverage limitations, outdated information, delayed verification, and lack of communication. 

Focusing on individual denials rather than addressing systemic issues
Focusing solely on single denials rather than addressing systemic issues can result in a reactive, rather than proactive, approach to denial management, and lead to a cycle of repeated denials. 

Not tracking and analyzing denial data
Failing to track and analyze denial and appeal data will lead the practice to miss out on valuable insights into the root causes of denials and the effectiveness of appeal strategies. 

Appealing every denial
Not every denial is worth the time and resources to appeal and trying to appeal every denial may prevent the practice from focusing on efforts that would bring a higher return on investment as well as drilling into root causes so that denials can be prevented. 

By avoiding these common mistakes, medical practices can reduce denials, improve cash flow, and provide better care for their patients. 

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