The problem with denials management is that it’s a large, often manual, process that takes a long time and involves a lot of people. While larger organizations may have staff who can take on these responsibilities, not everyone has that luxury.

So, what can you do to mitigate or even solve the problem that’s likely causing hours of staff frustration and potentially millions of dollars in annual revenue?

Streamline the process.

Creating easily identifiable steps and enacting them across your organization can produce results you start seeing right away.

According to a revenue cycle benchmarking report, initial claim denial rates are up by more than 18% since 2020.¹ Taking control of your denials management processes has at least one obvious benefit: less revenue loss.

Finances are critical to businesses, but these processes also have a deeper impact. When your denials processes are functioning effectively and efficiently, it also means:

• Less stress for staff members and higher job satisfaction
• More empowered and productive workers who can focus on higher value work instead of tedious manual processes
• Less mistakes when submitting claims
• Less confusion around required tasks during specific process stages, especially for organizations with complex reporting responsibilities
• Quicker turnaround times for denials
• Better documentation at all levels
• Higher patient satisfaction

With so much information available, it’s easy to get overwhelmed. This is especially true when you’re a small or medium-sized practice because you may be interested in deploying a different technological set up than larger practices. Whether you’re looking for a quicker, simpler implementation or something more customized, automation and technology can make your work life easier.

The size of your practice makes a difference when implementing processes because the work you and your staff do has to meet your needs. At the end of the day, though, the goal is to better manage denials, no matter how many providers and staff members you work with. The same steps for creating a successful process apply across the spectrum of business sizes and models.

At a high level, there are five steps needed to quickly act on denied claims.

Collect data on which claims have the most denials and separate them into like categories. Consider information such as volumes and amounts over time, reason groups and codes, procedure codes, and regions, states and facilities.

Decide which group and/or types of denials are the priority and focus your efforts on those first. Common initial claim denial reasons include prior authorization/precertification, request for information and medical necessity.¹ These reason types could be a good place to look for your priority claims.

Using the data you’ve gathered, take action and work your priority claims. As you do, note extra steps and/or details you need to ensure the denials have the best chance of being successfully overturned. Watch for repeated errors and patterns in reason codes for denial so you can avoid them in the future.

You may notice that putting similar denials into a work queue is tricky but doable. Grouping the trends isn’t necessarily the hard part, but how to make the process more efficient. Two common ways to improve these often very manual and time-consuming processes are through automated technology or using advanced functions in Microsoft Excel.

Additional ways to work the trends:

• Once you’ve identified a trend or likely cause of denial, take time to understand the payer’s appeal process. Research past trends to see what information was needed to successfully appeal the claims and note these patterns. If you track the changes as you go, you’ve made subsequent appeals easier and more likely to succeed.
• Submitting the appeal is only part of the process. Once you’ve submitted, make sure to track it to the payer and follow up based on the expected appeal recovery time. If the recovery time wasn’t something you noted in your initial research, go back and look at the historical data to give you an estimate on processing time. If necessary, call the payer.

When you’ve done research on your organization’s data and spent time working priorities and trends, it’s time to stop and think. Analyze the process and results. Consider what worked and what didn’t. This step is qualitative rather than quantitative, so take time to fully describe what’s going on with and around the numbers.

During your deep dive, note potential patterns or trends that could become problematic for your organization. Being proactively aware of what’s going on is critical to building and maintaining efficient processes.

When you’ve compiled your report, communicate your findings with the leadership team. One report that’s particularly useful for leadership to understand is a denial opportunity report. As you can see in Figure 1, the example, revenue cycle management software can create a visual explaining which denial reasons are most prevalent for your practice. In this example, the chart is based on expected dollars per claim. Recovery probability uses reason codes to explore patterns and determine how likely it is the denials can be recovered.

When you pull reports like these, especially when they have visuals, it’s easier for others who aren’t doing revenue cycle management tasks every day to see the trends you’ve identified. Have an open conversation about what’s working and what’s not so you can execute on decisions as a team.

This is your chance to see, and show your organization’s leadership, that the changes you’re making are working. These reports should demonstrate how the new process is performing and what additional long-term changes or steps may be necessary.

Every practice has specific needs, so your financial reports may be different from others; however, there are basic reports you can begin to pull at a regular cadence to help you get started.

Monthly, weekly, and daily reports are all common for financial reporting. Monthly reports generally track progress and identify trends such as denial history and recovery results. Weekly reports establish work items. These can be reports like the denial opportunity report example in Figure 1 that demonstrate priorities for day-to-day tasks. For everyday use, daily reports are a great way to get a “temperature check” on the denial rate, service lines and charge amounts that are being denied, and even the top reason code groups.

Higher levels of leadership in an organization aren’t always in tune with back-end processes, so being able to demonstrate a successful denial management and recovery strategy could be key for getting additional resources you need.

Successfully improving and/or building processes for revenue management requires you to address the cause of the denials in your original data gathering. Has choosing a defined set of priorities helped reimagine your process? What holes, bottlenecks or other issues have surfaced as you’re working the process? What can you do to streamline and make your processes even more efficient going forward?

A few key ways you can measure the effectiveness of your new processes include:

• Benchmarking
• Key performance indicators (KPIs)
• Setting measurable goals and tracking progress
• Monitoring and updating report processes when necessary

One Cognizant client explained that after working with our team, they can now access reports to quickly and easily isolate reimbursement issues. They can “slice and dice” the claims data to fully understand what’s impacting reimbursement, and when physicians have questions, they’re able to get a good picture of what happened and why. The insights are user-friendly, which means the client can collect revenue and fix claims issues. This allows leaders to focus on the big picture and growth opportunities rather than mitigating day-to-day struggles.

• Make an effort to understand the upstream processes to prevent denials in the future.
• Categorize the denials and upstream staff needed and review what has to change.
• Document everything you find and use it to build organizational processes, then institutionalize the processes.

Denials management is a big job that requires efficiency. Every practice and organization faces unique challenges, but if you follow the steps from data gathering to review, you can start taking control of your processes. It’s time for them to work for you, not prevent you from spending time working for your patients.