Tackling denials: trends and solutions for one of healthcare's biggest revenue barriers

Denial rates have risen substantially in recent years and that trend isn't abating. This presents a huge challenge because denials are a large and growing cause of revenue leakage. 

In a webinar hosted by Becker's Hospital Review and sponsored by Deliver Health — a healthcare software and services company with a set of interconnected solutions that improve customers' capabilities to solve systemic issues — Leigh Ann Braswell, director of coding solutions, and Nicki Bucceri, senior manager of coding solutions, both of DeliverHealth, shared insights on trends in denials and how to successfully approach denials management in today's post-COVID environment.

Four key learnings were: 

1. Denial rates have been rising. According to the Change Healthcare 2020 Revenue Cycle Denials Index, the average denial rate is up 23 percent since 2016 and has risen by 11 percent since the beginning of Covid; 86 percent of denials are avoidable.

Reasons for denials include issues with eligibility or registration (26 percent of denials), missing and invalid claims data, lack of coverage or authorization, medical coding issues and issues related to medical necessity. The good news is that with the right denial management strategies and solutions, those numbers can improve greatly.

2. Start by knowing your denial rate. Many providers — 67 percent in HIM Briefings' 2022 Denials Management Survey – don't know their denial rate. But it's an important metric that indicates the revenue cycle's overall health and integrity. "The average national denial rate is between six and 13 percent," Ms. Bucceri said. "If your denial rate is over 10 percent, you really need to be taking immediate action to reduce it."

3. Build a denial management team and process. It's critical to include a variety of team members from the organization in a cross-functional denial management team, especially those involved on the front end like admissions, registration and patient access staffers. 

Then, track key denial metrics: the number of denied cases, reasons for denials, top CPT codes being denied, diagnosis codes involved with denials and other key data for analysis. 

For example, many denials come from inpatient clinical validation issues, Ms. Braswell said. Payers may have different codes and requirements, and the frequency of updates to codes, missed instructions, lack of alignment between codes and clinical criteria can all lead to denials. "There are ways to really collaborate with your team and prevent these denials from happening," she said. "Determining the type of denial is the first step." 

4. Partner with an automation solution provider. For organizations that use Epic, simple visit coding is a great first step, Ms. Bucceri said. Autonomous coding offered by best-in-breed solution providers like DeliverHealth takes that a step farther with artificial intelligence. "Deploying autonomous coding strategically can create efficiencies that can prevent or eliminate claim edits or denials," Ms. Bucceri said. "Since they can code records in a matter of seconds, you're almost guaranteed never to miss a timely filing date."

Remember, the majority of denials are avoidable. A combination of the right people, processes and tools can have a dramatic impact on reducing the organization's denial rates and the time it takes to work on them. AI and other tools can assist teams in building efficiency, increasing accuracy, driving down denial rates and ultimately, increasing revenue.

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