RCM tip of the day: Identifying the root causes of denials

Discovering the reason for a hospital claim denial can help healthcare organizations improve revenue cycle performance, according to Susan Eilman, senior healthcare consultant for revenue cycle transformation at Hayes Management Consulting.

Ms. Eilman shared the following tip with Becker's Hospital Review.

"Recently I was working with a revenue cycle director who researched root causes for registration and eligibility denials and identified a specific clinic with a denial rate of 42 percent. This director contacted the clinic and asked the clinical director, 'Why does your location have a denial rate of 42 percent due to registration and eligibility denials when the industry standard is less than 5 percent?' The clinical director quickly researched the issue in search for the root cause and found the newly hired staff were not terming inactive insurance properly. The director successfully resolved the problem by training staff how to verify insurance by using the verification tool, teaching them how to term the inactive insurance, how to confirm primary insurance, and how to collect co-pays from the patient at the point-of-service.   

"Although the clinical director in the example above found the root cause and a solution, audits were established and conducted to monitor staff productivity and ensure they continued to complete processes correctly. The location's denial rate went down 20 percent within the first month after training was completed and POS collections increased 50 percent. The denial rate continued to decrease for this clinic and staff began to communicate issues with insurances as they experienced them. Because the revenue cycle director had asked 'why,' the root cause was discovered, a solution was found, and the clinic's increased revenue followed.

"Continue to ask 'why' for every denial until the root cause is exposed. Once the solution is determined, then strategize and develop a plan of action to diminish the reoccurrence."

If you would like to share your RCM best practices, please email Kelly Gooch at kgooch@beckershealthcare.com to be featured in the "RCM tip of the day" series.  


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