How to Handle Claim Denials for Better Cash Flow
Help reduce delayed payments.
Insurance claim denials can cost practices thousands of dollars every year in lost revenue and eat up precious office resources when these denials aren't handled efficiently.1 The delay between the time you have to pay your suppliers and staff and the time you collect payments from your patients interrupts your practice's cash flow. Factor in even more lag time for resolving claim denials, and you can see why a streamlined solution is in order. Designing an effective process for quickly handling denied claims can help boost your cash flow to keep your practice financially healthy. These three steps can get you started.
The best way to limit the impact of denials is to keep a log of all insurance claim submissions and monitor their progress.2 An effective tracking system will include the insurance company, the amount of the original claim and the date it was filed. Too often, a filing error or lost paperwork can lead to a denial, so one person in your office should be regularly reviewing the status of all submissions and following up on any delays.
Learn the ABCs of the EOB
Clerical errors are the leading cause of claim denials, so recovery usually begins in the explanation of benefits (EOB) form. Often it can be a simple fix, such as correcting the patient identification number, the age or sex of the patient, or a coding error on the claim form. These types of denials can usually be corrected either online or with one phone call, but it's critical to catch them early in order to keep your cash flow and accounts receivable on track.
Log All Denials
Every denied claim should also be tracked and include the name of the insurance company, the claim amount, the cause for denial and the action taken. This will help quickly identify problem areas that can be addressed.3 For example, if problems keep coming up with the same insurer, someone on your team can follow up with the company and then provide training to your staff to make sure your staff is up to date on that company's filing procedures to help prevent problems from reoccurring.
Appealing insurance claim denials can be expensive and time consuming, especially for small practices with limited resources. The best offense, though, is always a good defense. Taking these proactive measures now can help limit your denials in the future.