Claims denials are a major source of headaches for healthcare organizations. On average, denied claims can take more than two weeks longer to pay out than first-time claims, if they get paid at all. Denials can have major downstream impacts, including lower annual net revenue, additional hours spent on administrative work, and potential disruptions to patient care.
Claims denials aren’t just an occasional inconvenience, either. A recent American Hospital Association (AHA) survey found that 89% of all hospitals and health systems have seen a rise in denials over the past three years, with half of the participants describing the increase as “significant.”
Data from Healthcare.gov confirms this trend. The Kaiser Family Foundation (KFF) states that in 2019, health plans available on the individual market denied an average of 17% of all claims – up from 14% the year before. It’s becoming more critical than ever for healthcare organizations to employ integrated, intuitive, and technology-driven strategies to get their claims paid in a timely and efficient manner.
Reduce claim denials by eliminating administrative errors and manual processes
Health plans can deny claims for any number of reasons. The good news is that in 2019, KFF found that less than 1% of claims were denied based on medical necessity. The bad news is that the remaining 99% were denied largely due to other reasons. This included referrals, prior authorizations, coverage disputes, data errors, and clearinghouse problems.
Many claims denial issues occur when organizations rely on manual processing of complex documents that are subject to ever-changing requirements from a wide variety of payers. Mistakes are not uncommon, and that ends up costing time and money. Smart, intuitive claims management workflows that take advantage of automation technology can augment staff resources and reduce the likelihood of errors.
Automation contributes to clean and accurate claims the first time around. According to the Council for Affordable Quality Healthcare (CAQH), manual processing can take an average of four minutes per claim. Automation cuts this time by 25%, bringing the total time per claim down to just three minutes.
This might not seem like a lot in isolation; however, it becomes more material when the time savings is applied to a large, multi-hospital health system that partnered with Experian Health to revamp its claims processes. The health system gets through 200,000 claims per month. That could translate into 200,000 minutes saved – or more than 3,300 hours – every 30 days. Amidst the staffing shortages that are persistent in healthcare, those numbers are significant.
For providers of all sizes, the right automation tools use an expansive library of national payer edits, supplemented by custom edits, to ensure that claims are clean before they get out the door. These tools can also organize and prioritize accounts to help staff members use their time most efficiently.
If a claim does have an issue, organizations can use additional technologies to stay one step ahead of the denials process. Enhanced claim status monitoring can give providers insight into potential problems long before the ERA and Explanation of Benefits are processed. This allows organizations to address known issues and predict their revenue cycle outcomes earlier and more accurately.
Automation can also help providers slash even more time off the claims management process. The Council for Affordable Quality Healthcare (CAQH) estimates that it takes between 14 and 30 minutes to complete a manual claims status inquiry. Automated status monitoring can potentially shave 9 minutes off this task, freeing up staff to complete other tasks.
There’s still plenty of options when claims do get denied. Providers can complement their claims capabilities with denials workflow management tools that can generate customized worklists, highlight ANSI reason codes and payer proprietary codes, and identify payer-specific denial trends to help inform decision-making.
Automation creates a faster, more accurate claims processing ecosystem
Most healthcare organizations use a number of different technologies to manage their revenue cycles, and all these systems must work together in harmony. Unfortunately, interoperability across disparate clinical and financial systems isn’t easy to achieve.
In the case of the provider that chose Experian Health to improve its claims process, integration with Epic, its medical records system of choice, was very important. For example, ClaimSource easily loaded customized edits and the edits library into Epic, tracked and corrected claims, and found and repaired issues with the system build, creating opportunities for cross-training and centralized reporting.
Thanks to this automated, integrated process, this provider improved its acceptance rate by 10 percent, consistently seeing 99 percent of its claims accepted. Additionally, its clean, paid claims percentage increased by over 10 percent, creating a more predictable, profitable revenue cycle.
With denials on the rise in an increasingly challenging claims management environment, providers will benefit from replacing manual processes wherever possible. Automation is the key to optimizing staff resources and significantly reducing reimbursement obstacles.
To see sustained success with your revenue cycle, get in touch with Experian Health and start automating your claims process today.
