In the ever-evolving healthcare revenue cycle management (RCM) landscape, denial management remains a critical challenge for providers. Denials are impacted at every stage of the revenue cycle. In an Infinx Office Hours webinar, Bimal Sahoo, Principal Product Manger, provided insights and effective strategies for managing denials, emphasizing a holistic approach that integrates people, processes, and technology. In this article, we’ll cover four strategies and specific action items you can take to make improvements at your organization.

Understanding Denials: A Holistic Perspective

Before diving into specific strategies, it’s essential to understand that denials are not just a backend issue but can originate from various stages of the revenue cycle. According to Bimal, “knowing where your denials are coming from is critical to resolving them. Denials can arise from patient access activities like intake, eligibility and benefits verification, and prior authorization, and from mid-cycle processes such as coding and billing.”

Strategy 1: Data-Driven Denial Management

One of the foundational steps in effective denial management is leveraging data to gain insights into denial trends and root causes. Bimal emphasizes the importance of categorizing and tracking denials meticulously. For example, you may see a sudden spike in clinical denials related to authorization and medical necessities. By segmenting denials into categories such as zero pay and partial pay, providers can monitor denial rates more accurately and identify patterns that need attention.

Key Actions:

  • Categorize Denials: Separate denials into zero pay and partial pay categories to understand their impact better.
  • Denial Mapping: Create a denial hierarchy by mapping Claim Adjustment Reason Codes (CARC) and Remittance Advice Remark Codes (RARC) to specific denial reasons.
  • Track Metrics: Regularly monitor denial rates, appeal success rates, and the effectiveness of resolution efforts.

Strategy 2: Enhancing Processes Through Technology

Integrating advanced technology such as machine learning and artificial intelligence (AI) can significantly enhance denial management processes. “These technologies try to understand or learn from historical data to help predict the likelihood of denial recovery and prioritize claims based on their potential for successful resolution,” explains Bimal. Without technology like this, it can be difficult to predict the likelihood of reimbursement consistently. This enables teams to more effectively prioritize.

Key Actions:

  • Implement AI and Machine Learning: Use these technologies to analyze historical denial data and predict future trends.
  • Prioritize Claims: Focus on claims with higher chances of successful recovery based on predictive analytics.
  • Automate Workflows: Streamline processes through automation to reduce manual errors and increase efficiency.

Strategy 3: Continuous Improvement and Staff Training

A robust denial management strategy involves continuous process improvements and regular staff training. How an organization takes insights from their data and dissipates it across the organization is important to manage denials. By educating staff on the latest payer guidelines and effective denial resolution techniques, providers can reduce the occurrence of denials and improve overall RCM performance.

Key Actions:

  • Conduct Regular Training: Ensure that front-end staff, coders, and billers are up-to-date with the latest payer requirements and denial management practices.
  • Foster Collaboration: Encourage communication and collaboration between patient access teams, billing departments, and RCM specialists.
  • Implement Feedback Loops: Use denial data to identify areas for improvement and implement changes promptly.

Strategy 4: Proactive Denial Prevention

Preventing denials before they occur is far more efficient than resolving them after the fact. This proactive approach involves understanding payer guidelines, ensuring accurate patient data entry, and verifying insurance coverage and benefits early in the process. Bimal advises, “always pay attention to your payer guidelines…have a team that focuses on it.”

Key Actions:

  • Verify Patient Information: Ensure that all patient data, including insurance details, is accurate and up-to-date.
  • Stay Updated on Payer Guidelines: Regularly review and comply with the latest payer policies and requirements.
  • Implement Pre-Authorization Checks: Conduct thorough eligibility and benefits verification to prevent authorization-related denials.

Conclusion

Effective denial management in 2024 requires a comprehensive approach that combines data-driven insights, advanced technology, continuous improvement, and proactive prevention strategies. By understanding the root causes of denials and implementing these strategies, providers can enhance their RCM processes and ensure better financial health for their organizations.

As Bimal Sahoo aptly puts it, “denial management is not just about recovering A/R or reducing denials. It’s also about imparting knowledge so denials don’t happen in the future.” Embrace these strategies to build a robust denial management framework and drive success in the coming year.

About Bimal Sahoo

Bimal Sahoo is a seasoned expert in the field of healthcare revenue cycle management, bringing over a decade of experience to his role as Senior Product Manager at Infinx. With a deep understanding of the intricacies of RCM and a passion for leveraging technology to solve complex problems, Bimal has been instrumental in developing and refining Infinx’s Accounts Receivable (A/R) and Denials Management solutions. His insights, drawn from extensive industry knowledge and practical experience, offer valuable guidance for providers seeking to optimize their denial management processes and improve financial outcomes.