The COVID-19 pandemic has exacerbated just about every challenge providers face when it comes to revenue cycle management, but denial management is perhaps one of the areas most significantly impacted. And that’s an unfortunate turn of events, since studies have reported the average hospital denial rate had increased 23% from 2016 to 2020.
A new epidemic for providers
That increase has challenged healthcare systems across the country with their own ‘denials epidemic.’ But while providers are no doubt concerned about that steadily increasing figure, there’s evidence it’s not an insurmountable challenge. For example, studies have demonstrated that 90% of denials are preventable. Of course, successfully preventing them requires a skilled preventative strategy guided by strong leadership and executed by a well-equipped and well trained team.
According to a recent report, as much as 65% of denied claims are never resubmitted. This is due to a variety of factors, but many providers point to a handful of reoccurring culprits: limited staff, deficient tools and technology and a lack of exception-based workflows. Of course there’s one more important reason providers struggle to follow-up on so many denied claims: cost. Per one study, it can cost up to $118 to appeal a denied claim, which adds up to $8.6B in nationwide administrative costs.
All of that amounts to a rather serious issue—providers are losing out on valuable revenue they could use to reinvest in their frontline workers and community, where it’s needed now more than ever. For providers looking to achieve and maintain a clean claims rate above 90%, effectively managing denials has become an ongoing challenge where any progress is off-set by target milestones that seem to keep moving beyond reach.
So how do you outsmart those moving targets?
First, it’s important to understand that the past five years have drastically reshaped the healthcare landscape and affected denial rates. And now that providers are contending with a global pandemic, they’ve got a whole new set of problems to address:
- Workflow and technology changes necessitated by the transition to a remote workforce
- Uncertainties around payment caused by the unprecedented increase in telehealth services
- Delays in claim adjudication becoming more common as both providers and patients struggle to adjust to the new normal of working from home
- The swift introduction of new telehealth rules and regulations, as well as billing adjustments and new codes related to COVID-19 and virtual care
Many of these problems continue to evolve at a rate that’s hard to keep pace with. One only needs to look at the struggles staff encounter as they try to keep pace with updates to rules, regulations and codes that regularly appear without much warning. Indeed, keeping track of those updates requires not just a dedicated team, but tools and tech that can properly monitor and regularly provide updates on the most relevant details.
Indeed, if revenue cycle teams are to succeed in today’s healthcare landscape, they must be equipped to navigate a constantly changing environment while determining the keys to maintaining revenue stability, reduce the risk of denials and protect cash flow.
There’s little margin for error or waste when it comes to outsmarting the moving denials target. For those providers looking to efficiently take on the challenge, they can look to the following three strategies for guidance:
1. Allocate denials for smart follow-up
Using automated solutions powered by AI and RPA allows you to automatically triage and prioritize denials, identifying those with the highest likelihood of being overturned on appeal without needing to waste valuable staff time and energy.
2. Automate front to back processes
With an automated set of solutions (ideally operating through a fully unified RCM platform) supporting front to back processes, you can leverage machine learning and AI to contrast expected and actual outcomes to outline weakness in your rev cycle and establish targets for realistic process improvements.
3. Avoid write-offs across all channels
The real key to improving your long-term strategy for avoiding denials is understanding the root causes behind your most persistent issues. Analytics and dashboards can give team leaders high-level insight into those issues with reporting on KPIs that identify the departments and processes that need the most help and attention to structure ongoing improvements.
Wrapping it up: the tools you need to hit your target
While providers may find themselves strongly challenged by the current healthcare landscape and the uphill struggle to achieve a better denial rate, new strategies and solutions have already arrived that make achieving their goal more attainable than ever before. Smart, streamlined workflows that give teams the ability to easily edit and resubmit denied claims. Customized workgroups that automatically route denials to the right team. Robust reporting, stronger analytics and automation that drastically improves productivity—they all add up to a smarter, simpler approach to denial management and a stronger bottom line.
Want to see how Waystar can help? Check out our Denial and Appeal Management solution and learn how you can hit the moving denial target with ease.
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