Denial Management: How to Reduce Rejection and Streamline the Appeals Process

Denial management isn't always easy for a growing private practice. You may think you're doing everything possible to submit clean, accurate claims to payers, yet denials still persist. How can you implement systems to prevent denials while also improving your appeals strategy? How can you help patients who are upset after an initial denial? These tips should help bridge the gap between what's best for your practice's administrative policies and what's best for your patient base.

Reducing Your Practice's Denial Rate

Denials often occur because of manual errors, such as miscoded procedures or paperwork mistakes, according to American Medical News. Here are a few procedures you can implement to help reduce your practice's denial rate:

• Get all the information up front. Before your patient comes in, get their insurance information, including the carrier, ID number, and group number. Contact the carrier to make sure the patient's plan covers the service they need, and find out if the carrier requires pre-authorization or a referral. By doing your homework first, you can avoid some denied claims before they happen.
• Make sure your codes are specific. According to the Medical Group Management Association (MGMA), many claims are denied simply because the diagnosis wasn't coded to the highest level o f specificity Power Your Practice cautions practices to be sure to use the highest level for each code. They use hypertension coding to illustrate: Don't just submit a claim with a hypertension diagnosis of 401, because that will be denied. Instead, add a fourth digit to denote a more specific type of hypertension, such as 401.0 for malignant essential hypertension. For diabetes, you'll need a fifth digit, such as 250.01 for diabetes mellitus type one (or juvenile diabetes) instead of just 250.0 for diabetes.
• Keep track of all the little details. You'd be amazed at how picky some insurance payers can be, so make sure everything is filed in a timely manner with easy-to-read claims. Meanwhile, document your denied claims and see if they always result from a certain procedure or carrier; this can help pinpoint a consistent problem that's holding things up.

• Make sure the medical documentation supports authorization. Be sure to include details on conservative therapies already tried and documentation of relevant labs, imaging, and other medical information that supports the requested service.

Pushing Denials Through

A denied claim is frustrating, but it can still be approved. In fact, American Medical News reports that 39 to 59 percent of appeals are successful, so don't just write off a denial. To help expedite the process, MGMA recommends creating an appeal-letter template for the most common types of denials. You can also invest in appeals software that helps you streamline the process, making appeals faster and keeping close track of each appeal's progress. You might also want to think about joining a medical network, which can help your practice deal with the appeals and denial management.

Keeping Patients in the Loop

Be proactive when helping your patients understand why a claim was denied, and let them know you're working on making things right by explaining the steps that you're taking to work with the insurance company. A big reason why patients get frustrated is because they think their doctor is dropping the ball or doesn't care, so make it very clear through your actions and correspondences that your practice is on the case.

If the worst-case scenario happens and you can't get a denied claim approved, try to provide your patient with alternatives for financial assistance. Some private practices offer payment plans and discounted rates for these situations. Develop a financial-assistance website, brochure, or worksheet that shares government programs and charities the patient can contact for help.

Remember, the key to dealing with denied claims is being proactive early on when you start to face them on a regular basis. You may have to do a bit of detective work to figure out why certain denials keep happening, but if you find a pattern, you'll move through the appeals process more quickly as it becomes more familiar. Make sure your patients know what's going on so they never feel like they're falling through the cracks.