5 steps to dealing with Denial & AR ageing issues?
Did you know that 65% of total medical claim denials are never corrected and re-submitted for reimbursement? Yes, most of the internal billing staff give up as soon as the claim is denied. However, it is known for a fact that most of the times all it takes to clear AR ageing issues and medical claim denials are to simply resubmit. In order to implement it effectively, let’s understand the root cause of the problem.
With declining margins, increased rejection volume, and limited billing staff capacity, hospitals and health systems must weigh the costs of pursuing claims that have been outstanding for more than 90 days. It’s because any system utilizes a lot of resources which in turn robs the team of their valuable time to go through ageing AR issues eventually leading to exhaustion. This might even affect the new revenue. This is proved by a simple stat here, “Claims denial and account receivable aging are major factors towards the debt faced by 30% of responding facilities and healthcare systems.” What many organisations in a situation of AR ageing do is instruct their primary AR resolution vendor to continue working on claims that have been in the system for more than a certain number of days, the vendor will frequently recommend that the claim be written off if they are unable to resolve it within the agreed-upon time frame. So, what can be done? This becomes a rather frustrating procedure to go back and forth with the Insurance companies and come to a unanimous decision. But one cannot deny that either way it is a lose-lose situation for any healthcare system. So how can one tackle this situation? Here are the most effective solutions.
An extra push toward Insurance collections can lead to cash recovery:
Every organization at one point or another needs secondary sources of fund collection at some point to resolve the bad debt. This is the case in healthcare systems as well, more so, healthcare systems depend on these secondary sources more than anyone as they keep patient treatment on their priority list. The solution to the Denial and aging issue is as simple as an extra push.
What revenue opportunities do we have?
The most important opportunity is to explore an external team for pre-write-off AR recovery resolution. The accounts receivable management or the medical billing staff are not always the expert when it comes to denial resolution efforts. It’s simply because this doesn’t fall in the medical billing work niche. This leads to abandonment that has resulted in almost 65 per cent of claims never being processed at all. Isn’t that a shocking number? Yes! It’s because denial claims are particularly a high skilled arena which requires dedication, skill, patience and effective decision-making abilities. An external team dedicated to the denial process can help organizations set up a procedure in order to achieve more closed deals when it comes to medical claims. It can both be outsourced or trained internally depending on the organization’s budget.
100% claims resolution
As a Healthcare firm, the most important power one can hold is to recognize your right to ask, the right to take a more proactive and aggressive approach with Aged Claims before they turn into non collectibles. To substantiate, a multi-speciality hospital in California with a 1,000-bed capacity along with a branch to an academic health science centre has collected $50 million in revenue from highly-aged claims that otherwise would have been written off. In one of the rare instances, this hospital is also one of the only ones to have achieved a 100% resolution rate with all their claims. So, what was their secret to achieving this milestone? Below listed is a triage approach to theproblem and makes sure maximum aged claims do not end up in denials.
- The internal staff works on commercial accounts up to 60 days from the billing date.
- A primary AR vendor works accounts for the next 120 days from day 60 to 180.
- A pre-write-off vendor, also known as a secondary AR management firm, focuses on highly-aged claims of 180 billing days or greater.
Steps to achieve pre-write-off recovery:
- Measure the efficiency of your current method to deal with aging claims: In order to measure the efficiency of the process followed at a firm for aging claims and denials by the medical staff, what are the questions that one needs to answer?
- Are there any claims older than 300 days? How does one get in touch with vendors that aren’t in active logs? What is the systematic process for taking accounts back from your vendor? Is anyone internally or externally working on accounts that are over 300 days? Do you have an established process for writing off claims with specific time parameters?
- Hospitals may ensure that either hard dollars are collected or uncollectable claims are validated and deleted from the balance sheet by recruiting a proven pre-write-off insurance collections provider as part of a zero-per-cent write-off strategy.
- In any situation, the organization benefits from a 100% claim resolution rate. However, in order to obtain the highest revenue potential and avoid the common practice of writing off tiny amounts or fighting claims, it is necessary to continue to pursue the claim to the fullest extent possible.
- Intelligent automation can be utilized to understand the exact cause of denials and a new strategy can be developed based on the data collected to either avoid or deal with the recognized problem. This will also solve the issue of extra time utilization by the internal team as intelligent automation is not only more accurate but also faster to collect all the data.
Let us know if this helped you and your agency. If you are someone looking to outsource medical billing staff and manage your Revenue cycle, we can help you. Connect with us today to know more about it.