Cracking the Denials Code:
Enhance Healthcare Financial Performance
Healthcare finance leaders serve as a cornerstone within their organizations and they are equipped to identify what’s working well, invest in technology and set goals to improve financial performance across the revenue cycle.
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According to FinThrive’s 2024 RCM Transformative Trends Report, which surveyed 92 healthcare finance executives, 70% said increasing revenue was their top goal this year.
But what strategies need to be implemented to capture every dollar?
Healthcare leaders say it starts with denials.
76%
said reducing denials was the top planned initiative
67%
indicated the need to improve the prior authorization process – a common source of denials
36%
stated improving the patient payment experience was a factor
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Now, let’s look at the “why” behind the denials conundrum in healthcare.
With every passing year, denials seemingly become a bigger thorn in the sides of providers and patients.
The reason? Payers are playing hardball.
The burden is only getting heavier for hospitals and health systems
97%
report patients experienced delays or denials for medically necessary care due to prior authorization requirements1
95%
report increases in staff time seeking prior authorization approval2
84%
say the cost of complying with insurer policies is increasing3
78%
indicated that their experience with commercial insurers is getting worse4
Denials also impact healthcare organizations’ bottom lines
$1.6M
in denial write-off adjustments
(mid-sized $350M NPR hospital)5
7-11%
of claims are underpaid6
Denial write-offs are only getting worse
4X
Since 2018, denials have increased four times7
<1% NPR
Industry best practice benchmark
4.6% NPR
Current average write-off percentage
So what can providers do to bend the denials curve?
Here are six ways to address some of the most common denials.
Inaccurate or Insufficient Documentation
Problem:Incomplete patient information, missing signatures and illegible paperwork can lead to claim rejection
Solution:Verify information during pre-service withdigital registration and patient scheduling solutions
Prior Authorizations
Problem:Disconnection or miscommunication between providers and payers makes it difficult to obtain necessary authorization prior to care
Solution:Streamline authorization processes with electronic, real-time solutions that facilitate better communication with payers
Coding Errors
Problem: Mismatched diagnosis and procedure codes or incorrect modifiers
Solution: Invest in coding education and training for staff, conduct regular audits and compliance checks to identify and fix coding errors quickly
Timely Filing Limit Exceeded
Problem: Failure to meet payer deadlines of when claims must be submitted
Solution: Utilize sophisticated claims technology to ensure timely claim submissions
Insurance Coverage Issues
Problem: Expired policies or services not covered under a patient’s plan
Solution: Verify insurance coverage and eligibility prior to billing with an insurance discovery solution
Point Solution Overload
Problem: Too many siloed technologies where data is not democratized, analyzed and centralized
Solution: Look to a revenue cycle management platform that offers end-to-end revenue protection across eligibility, claims and revenue integrity
Need a new strategy on how your healthcare organization should prevent or manage denials?
Discover expert strategies to mitigate denials and boost revenue in our comprehensive Denial Management Best Practices Guide.
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