7 strategies to prevent claims denials

Claims denials pose a serious issue for hospitals amid an already complicated reimbursement landscape.

“Denials are a huge obstacle to timely and complete reimbursement,” said Carmen Sessoms, associate vice president of the revenue cycle management advisory services program at Nashville, Tenn.-based Change Healthcare.

In 2016, Change Healthcare managed 1.8 billion transactions with a value of more than $3 trillion. Leveraging this data, analysts determined approximately 9 percent of claims with a value of $262 billion were denied. These denials impacted about 3.3 percent of net patient revenue, translating to an average of $4.9 million per hospital.

Denials are not only highly prevalent in the healthcare environment, but also very costly to appeal. While 63 percent of denied claims are recoverable on first appeal, additional labor and manpower associated with the appeal process equals an average of $118 per claim, or $8.6 billion overall for U.S. hospitals, according to Ms. Sessoms.

“Even though denials happen across the entire revenue cycle, a large percentage are associated with front-end processes like registration, authorization and eligibility,” she said.

During a Nov. 1 webinar sponsored by Change Healthcare and hosted by Becker’s Hospital Review, Ms. Sessoms joined Rick Childs, vice president of revenue cycle management at Rome, Ga.-based Floyd Medical Center, and Tony Rinkenberger, director of RCM at Waconia, Minn.-based Ridgeview Medical Center and Clinics, to share seven strategies hospitals can use to prevent denials…

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View all Articles by: Melissa Clark, CCS-P