Denial-management programs get claims paid

A column about keeping your practice in good health

By — Posted May 9, 2011.

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Deanna Brown, practice manager at Tennessee Valley Urology Center in Cleveland, Tenn., established a claims denial-management program when she began working there eight years ago.

She had seen the bottom-line importance of such programs at the practices where she previously worked.

"If we don't get it right, our claims will not get paid. We try to identify what we can control and what we cannot control," said Brown, whose practice has three full-time physicians and one part-timer.

A claims denial-management program is any system set up by a practice to determine why insurers are turning down claims. It allows practices to address denials, whether they are caused by the insurer or the practices themselves.

A U.S. Government Accountability Office report issued March 16 found that a significant percentage of denied claims went unpaid because of billing mistakes. Many denied claims are paid on appeal, but resubmissions add to the expense of the process.

"We do see occasional stall tactics," said Michael Gladson, RPh, senior director in the Chicago office of Huron Consulting Group. "But we also see a lot of practices with problems in understanding how a certain bill should get to the payer."

A claims denial-management program does not have to be complicated, and it can pay significant dividends. A computerized practice-management system may make it easier, but less high-tech solutions are available. Medical societies, including the American Medical Association, have numerous resources in this area. The AMA has several tools posted on its "Heal the Claims Process" Practice Management Tips website.

Experts recommend making a list of denied claims. This can be on paper or in electronic form. For instance, Brown records denials on an Microsoft Excel spreadsheet. The list should include the reason a claim was denied along with the name of the insurer, the type of plan and other details.

"Even on paper, you can see the most common denials that are occurring," said Daniel Marino, president and CEO of Health Directions, a health care consulting firm in Oakbrook Terrace, Ill. "And it doesn't matter if you are a solo practice or a group of 300 physicians. You have to figure a way to get to the source of the problem."

The next step is to identify the most common problems and devise ways to address them.

"Once you start seeing some patterns, dig a little bit deeper," said Laura Palmer, senior practice management consultant in the practice consulting division of the Texas Medical Assn.

Brown discusses the denial report at the monthly staff meeting. When she first presented her reports, she discovered that most denials were caused by staffers incorrectly entering a patient's identification number. Identifying instances when this occurred -- and the person responsible -- led staff to be more conscientious.

"A lot of numbers were being transposed, but we can go back to that person, help train them and try to troubleshoot," Brown said. "This has reduced our denials significantly."

The GAO report found that duplication and missing information frequently tripped up a claim. A significant number of denials were caused by the patient being ineligible, either because of receiving services before the insurance started or after it stopped. Experts say this issue can usually be addressed by verifying patient eligibility before the time of service.

But sometimes the problem is with the insurer, and practices that have implemented successful denial-management programs say this information is very useful.

Many such denials at Brown's practice are caused by insurers bundling services. She uses this information to negotiate higher rates for affected procedures.

"When it comes time to renew our contract, I take this information to the table and get the reimbursement increased," Brown said.

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External links

Heal the Claims Process, American Medical Association (link)

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