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Seven Ways to Stop Claim Denials

Consider these sobering industry statistics:

  • Claim denials impact more than 3.3% of patient revenue
  • 63% of denied claims are recoverable on first appeal (but are rarely appealed or reviewed for possible appeal)
  • Labor tied to the appeals process averages about $188 per claim

With denials remaining a significant roadblock to full and timely reimbursement, and while denials occur across the revenue cycle, a high percentage are associated with eligibility, authorization and registration activities, all front-end processes.

Below are seven strategies to apply to decrease denials:

Determine Root Causes

Study data from the revenue cycle management process to spot where and when denials happen, making sure you know the data is trustworthy, timely, and accurate. Focus in on: 

  • Inadequate documentation
  • Billing and coding mistakes
  • Patient registration errors
  • Case coordination/management
  • Past payer behavioral patterns

Install Business Rules on Quality

It is a good idea to update and maintain business rules to examine registration data for completeness, consistency and accuracy. An alert system identifying possible quality concerns will help identify and bring early resolution to any errors.

Review Priorities

Almost 24% of all US claim denials fall under eligibility and registration problems with services not covered accounting for 10%. This means eligibility must be checked throughout the treatment process.

One way to improve the eligibility verification process is with thorough training in point-of-service collections as well as insurance and preregistration for all front-line staff members.

Probe Medical Necessity and Prior Authorization

Precertification and authorization errors make up 18.2% of US claim denials. Again, studying the data will uncover the reason for authorization denials. Was it because of an expiration, an incorrect procedure or whether the information was even obtained.

The best preventive action is to obtain the authorization up front. Also, if the payer approves the procedure, additional changes on a scheduled procedure still could result in a denied claim meaning a double check of the authorization prior to the procedure may be a good practice.

Sharp Claims Processing

Prior to routing the claim to the payer, the practice needs to review it for errors and make the changes. Any edits are best made customized to the payer. Proactive visibility resolves issues so install a process to identify, submit and monitor claims.

Analyze the Revenue Cycle

Analyzing the cycle regularly is the key to improving the claim denial rate. Scrutiny is needed every step of the way to maximize the effectiveness of claim denial strategies.

Success Stories


Average bill age when our office received: 180 days plus BALANCE: $ 1,233.00 PROBLEM: Claim denied needing primary EOB. SOLUTION: Claim billed to supplemental policy instead of MMAI policy which was effective for service date.
Average bill age when our office received: 180 days plus BALANCE: $ 2,176.00 PROBLEM: Claim denied because of no insurance coverage for service date. SOLUTION: Claim was filed to incorrect claims address.
Average bill age when our office received: 180 days plus BALANCE: $ 1,013.50 PROBLEM: Claim denied because of insurance ID mismatch. SOLUTION: Claim filed to traditional plan vs. community care.
Average bill age when our office received: 180 days plus BALANCE: $ 1,203.00 PROBLEM: Patient disputed charge/balance owed, comparing it to a similar past bill. SOLUTION: Explained itemized charges and balance owed because of deductible. Patient stated first time someone took the time to explain and set up a payment plan.
Average bill age when our office received: 180 days plus BALANCE: $ 1,007.50 PROBLEM: Denied by hospice as non-eligible benefit and Medicare as ID name mismatch. SOLUTION: Verified/corrected Medicare ID, name and date; confirmed hospice non-eligibility.
Average bill age when our office received: 180 days plus BALANCE: $ 1,305.00 PROBLEM: Denied no pre-authorization for service. SOLUTION: 3-way call with patient and insurance. No ER report on file when claim originally submitted. ER report since received.
Average bill age when our office received: 180 days plus BALANCE: $ 1,001.50 PROBLEM: Denied with "misrouted" and "claim not covered by payor". SOLUTION: 3-way call with patient and insurance. Claim was related to mental health so should have been filed through carve out policy.
Average bill age when our office received: 180 days plus BALANCE: $ 1,755.00 PROBLEM: No response from insurance after requested records submitted. Patient stated insurance paid. SOLUTION: Billing office did not receive/post insurance payment. Called insurance and records received but claims representative had not released for processing.
Average bill age when our office received: 180 days plus BALANCE: $ 4,540.50 PROBLEM: Multiple bills, same service dates as claims already paid. Denied due to no pre-authorization for service. SOLUTION: Call to insurance who verified no pre-authorization requirement. Two claims not found. To prevent duplicate denial upon resubmission, account rep notated resubmission for return transportation trip. Proof of timely filing submitted with claims.
Average bill age when our office received: 180 days plus BALANCE: $ 1,180.00 PROBLEM: Denied due to no pre-authorization for service. SOLUTION: 3-way call with patient and insurance. Claim should have been sent directly to IPA vs. umbrella insurance location.
Average bill age when our office received: 180 days plus BALANCE: $ 1,117.00 PROBLEM: Unpaid due to incomplete demographic information. SOLUTION: Contacted pick up and drop off locations. Sent release to obtain information and patient’s name misspelled.
Average bill age when our office received: 180 days plus BALANCE: $ 1,605.00 PROBLEM: Denied due to medical necessity. SOLUTION: 3-way call with patient and insurance. Spoke with multiple reps and received different answers including claim not found. Claim was found with no response from medical board. Patient had to submit medical records.
Average bill age when our office received: 180 days plus BALANCE: $ 1,007.50 PROBLEM: Denied multiple times as duplicate. SOLUTION: Located claim number ID, amount paid and date paid. Claim had already been paid in full but not posted.
Average bill age when our office received: 180 days plus BALANCE: $ 1,650.00 PROBLEM: No insurance on file. SOLUTION: Pick up location was state prison. Located inmate ID and could be billed to prison insurance as still within timely filing limits.
Average bill age when our office received: 180 days plus BALANCE: $ 2,295.50 PROBLEM: Denied as “forwarded to another entity for processing”. SOLUTION: Called insurance for medical group processing information. They did not have claim on file. Resubmitted with proof of timely filing.

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