Claim Denial Management

Written by Kimberly Clark
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Denied claims are a big source of lost revenue for all healthcare related entities. The losses are clearly more evident for the provider of the services than for the payers, but measurable losses do exist on both sides. Although they are valid claims, many providers just tend to write them off as bad debts.

Some healthcare providers have discovered the benefits of instituting a claim denial management program in their offices. Many have found that it allows them to maintain much better records. By actually tracking the reasons their claims were denied, they can more easily identify those that occurred most often.

After analyzing the most common causes for rejection, the healthcare providers are in a better position to pinpoint possible areas of improvement. For instance, a hospital might be able to determine if a particular department had more denied claims than others. And by thoroughly analyzing the payer's explanation of benefits (EOB), providers can determine if they are consistently making the same errors when submitting their claims transactions.

Common Reasons Claims are Denied

One study showed that 50 percent of denied claims could be attributed to problems stemming from the following types of transactions: coordination of benefits, benefit policy and benefit eligibility. Other reasons for denied claims were incomplete claims and lack of proper pre-certification before performing services. Having a software program in place that can determine eligibility right off the bat is a crucial step in avoiding claim denials. Also, in the event that healthcare providers decide to appeal their denied claims, a history of all the previously transmitted claims transactions is at their fingertips.

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