Commercial insurers inaccurately process about 20 percent of claims filed by medical practices. It's an industry standard that has weathered the test of time — though not in a good way.
That figure is viewed as an accurate benchmark, even though it comes from a three-year-old edition of the National Health Insurer Report Card, compiled by the American Medical Association, said Ken Bradley, vice president of strategic planning for claims clearinghouse Navicure.
That's a lot of money potentially left unrecovered by practices, and they need to own up to responsibilities if they're to improve their collections process. “Obviously, we're trying to drive that statistic lower,” Bradley explained. “What we really want to stress is prevention of denials in the first place.”
[See also: The medical practice evolves.]
Take Regional Urology, for instance. After implementing a denial management strategy, the Shreveport, La., medical group has been able to streamline workflow, avoid unnecessary payment delays, prevent lost revenue and reduce accounts receivable by as much as 50 percent, according to CEO Joel Young.
Over the past decade, determining patient eligibility and medical necessity, along with coding the encounter, have been the main factors in triggering denials in practices of all sizes. Navicure’s Bradley said that tools are available for reporting and tracking denial reason by payer, or in the aggregate by regional codes. Those reports then can drive necessary activities in the practice to review and figure out where to focus improvement efforts.
“Is there a coding problem in the practice? Is there a problem with the payer?” Bradley asked. “Those things need to be determined. Instead of looking at things in individual cases, the reports become actionable information for the practice to try to attack denials.”
Through proper attention to detail, denial problems should start to dissipate.
“Medical necessity is kind of a fuzzy area as it relates to medical policy,” Bradley added. “But things like patient eligibility and coding can be directly controlled by the practice.” Bradley and Young will co-present an educational session, titled “Three Steps to Better Denial Management,” at next week's MGMA annual conference in Las Vegas.