Healthcare denials are a significant issue for providers that directly affects their revenue stream. How? Each time providers resubmit a claim, they incur additional costs. To maximize revenue, modern healthcare organizations must focus on minimizing claim denials.
Healthcare organizations should use denial management analytics to reduce claim denial rate. Effectively managing claim data requires expertise, and mishandling it can lead to inaccurate results. For making informed decisions and saving costs in claims processing, providers should rely on AI analytics in healthcare that are specifically designed to manage denied and rejected claims.
This blog will show you the importance of using denial management analytics to reduce claim rejections. Moreover, you will explore key strategies and 4 best tools to get informed data about healthcare claims processing workflow. By leveraging these tools, providers can make informed decisions, minimize revenue loss, and enhance operational efficiency.
Why Healthcare Denials Happen?
Today, managing healthcare denials is the first priority for RCM professionals. According to a survey conducted by Experian Health, the top three reasons for an increase in claims denials were insufficient healthcare data analytics (62%), lack of automation in claims/denials process (61%), and lack of thorough training (46%).
3 Top Reasons For Healthcare Claim Denials
- -Insufficient Data Analytics – 62%
- -Lack of Automation in Claims – 61%
- -Lack of Thorough Training – 46%
Moreover, healthleadersmedia shows that the primary reasons for rising healthcare denials include frequent payer policy changes (67%), delayed reimbursements (51%), increased claim submission errors (43%), and higher denial rates (42%). In addition, many providers struggle due to insufficient data, lack of automation, and inadequate staff training. All of this led to billions in delayed or lost revenue and increased administrative costs.
Some took actions to address these issues like:
- 52% have upgraded claims processing technology
- 45% have automated payer policy tracking
- 44% invested in patient portals
- 40% improved cost estimates
- 39% digitized patient registration.
Strategies For Providers To Decrease the Rate of Healthcare Denials?
The listed key strategies can provide healthcare providers an informed approach to get AI-driven analytics and automation. Below are tried-and-tested strategies to minimize denials and improve reimbursement rates. Utilizing these will help them minimize denied claims in healthcare, speed up reimbursements, and improve cash flow.
1. Staff Training on Claim Submission
Patient ineligibility is one of the causes of healthcare denials which account for approximately 24% of denials. It is important to verify eligibility before each visit since patients frequently change jobs, insurance plans, or even locations. Providers should confirm whether the patient’s coverage is active, does the patient’s insurance plan cover the requested services, or if the patient has reached their maximum benefit limit. It also includes training staff to be able to interpret policies, understand accepted insurance plans, and discuss coverage benefits with patients. As a result, it can help prevent denials due to ineligibility.
2. Create a Quality Check Plan
One more reason for healthcare denials is insufficient documentation, incomplete data, or incorrect information. This means, one should understand payer-specific requirements when submitting claims. Moreover, staff should document in a comprehensive reference guide as each payer has its own submission guidelines including:
- Accepted claim formats
- Submission timeframes
- Reimbursement timelines
- Preferred submission methods
- Required supporting documents
- Emergency contact numbers for assistance
3. Detect and Identify Issues from Payers
It is important to analyze past claims over a 12-month period. This data-driven approach will help you get insights into common denial reasons and revenue loss. A thorough denial assessment should compare the number of claims submitted versus the number of denials which will identify patterns that need immediate attention.
4. Improve Documentation
Staff should familiarize themselves with payer policies and their specific rules. Understanding all this can significantly reduce denials. As each payer has different documentation requirements and deadlines for claim submissions. One should ensure compliance with these regulations and check for coverage eligibility before treatment. This way providers can maximize reimbursement rates.
5. Use Technology to Collect and Sort Data
In this fast-paced world, when everyone is using technology to stay ahead, healthcare organizations should also organize denials by type and cause. This can help pinpoint the most frequent issues. Moreover, categorisation should also include the monetary impact of each denial. As a result of this data, you will prioritize areas that need immediate improvement to boost reimbursements. As an outcome, it will prevent similar issues in the future.
4 Best Tools to Reduce Healthcare Denials by 30% – 50%
Claim management is one of the toughest tasks in healthcare revenue cycle management. To save time for RCM professionals, we have listed the best 4 tools that can help reduce healthcare denials. Using these will help providers minimise revenue loss, streamline workflows, and improve financial performance. Below are the four top solutions designed to tackle denial management in healthcare effectively;
1. Denials360 – AI-Powered Denial Management Solution
Denials360 is an advanced AI-based denial management software or platform. It uses machine learning and generative AI to optimize revenue cycle processes. However, the major focus is on automation and predictive analytics. Moreover, Denials360 helps healthcare organizations reduce denial rates by identifying root causes and providing actionable insights.
It has many features like AI-powered smart queues that helps prioritize claims based on impact and automates triage. It also has Gen-AI visualizations which automatically provides visual insights to make informed decisions. Another best feature is claim scoring which uses AI models to forecast approvals and detect underpayments. This platform also identifies recurring issues to prevent future denials. Lastly, customizable queues help providers in streamlining work management. As a result of using this software, healthcare professionals can have real-time alerts, proactive problem solving and automated appeals. These features make this tool a best one in improving revenue cycle performance.
2. Optum – Intelligent Denial Management
Optum’s Intelligent Denial Management solution has underlying technologies like AI and machine learning. It helps in identifying patterns, predicting denials, and recommending corrective actions before claims are submitted. It can also be integrated with existing EHR and billing systems to enhance efficiency.
One of the key features of this tool is AI-driven denial predictions and analytics. It provides an automated workflow for appeals and resubmissions. It also provides real-time claim status tracking. As a result, professionals can know the root cause analysis and prevent future denials which ultimately help them in reducing administrative burdens and improving cash flow.
3. Waystar – Denial Prevention & Management
Waystar is a denial prevention and management solution. It is designed to boost revenue cycle performance. The proactive approach helps providers identify and address denial risks. Moreover, this platform focuses on clean claim rates and reducing administrative inefficiencies.
The key features include predictive analytics to prevent denials before submission. It provides automated eligibility verification and claim status updates with AI-powered denial tracking and appeal automation. Moreover, it can be seamlessly integrated with major healthcare billing systems.
4. nThrive (R1 RCM) Denial Management
nThrive is a part of R1 RCM. It is a denial management solution that provides advanced analytics and workflow automation to tackle claim denials efficiently. With its AI-driven analytics providers can identify denial root causes of healthcare denials.
It can help with workflow automation for appeals and follow-ups which enhances performance benchmarking. The ability to keep denial trend analysis makes it a great tool for providers. However, it can be integrated with EHR and revenue cycle platforms.
Final Thoughts
On average, healthcare organizations experience a denial rate of 5 – 10 percent for healthcare claims that are submitted to payers. This number might look small but for RCM professionals it is huge as it directly impacts revenue. But with the right technology and tools, these organizations can streamline workflows, improve claim approvals, and maximize reimbursement rates.
Denials360, by Datarovers is a stand out product alongside solutions from Optum, Waystar, and nThrive. Denials360 offers cutting-edge technology to tackle denials proactively. It also ensures a healthier revenue cycle for providers.
Optimize your revenue cycle and reduce claim denials today!
