Healthcare Revenue Cycle Management, ICD-10, Claims Reimbursement, Medicare, Medicaid

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31% of Providers Still Use Manual Claims Denial Management

A HIMSS Analytics survey found that less than half of providers use an automated claims denial management system, but adoption rates are expected to rise in the near future.

- As the transition to value-based care carries on, many healthcare providers are reexamining their current healthcare revenue cycles to account for new alternative payment models. With providers experiencing an increase in claims denials and denial management issues, some organizations are finding that they need different solutions for handling value-based care and fee-for-service claims.

Less than half of providers use automated claims denials management program, says survey

According to a recent HIMSS Analytics survey, approximately one third of healthcare providers still use a manual process to manage claim denials.

“Given the complexities around submitting claims and the labor associated with managing denials, it came as a surprise that more organizations have not automated the denial management process through a vendor-provided solution,” said Brendan FitzGerald, HIMSS Analytics Director of Research. 

“The move to value-based care and alternative payment models will not happen overnight.  Until those models are tested and implemented, healthcare organizations will continue to focus on current processes, and automating the denial management process could greatly enhance collection efforts.”

The survey showed that only 44 percent of healthcare providers surveyed used an automated claims denial management solution from a vendor while 18 percent had built an in-house program.

Claims denial management systems must draw on information from across the care delivery spectrum, including clinical, health insurance, and medical billing data. With one foot in the revenue cycle management realm and another in the clinical setting, providers have a range of healthcare vendors that offer claims management solutions.

Through the survey, researchers discovered that most providers go through a clearinghouse vendor for a claims denial program, followed by 17 percent that said they use an EHR vendor.

Only about 16 percent reported that their organizations employ a best-of-breed revenue cycle vendor.

Despite slow adoption of automated systems, organizations with a vendor-provided solution are relatively satisfied with their claims management program, stated the survey.

When asked how likely a respondent was to recommend their denial management system to a friend or colleague on a scale of 1 to 10 (with 10 being the most likely to recommend), the average score was 7.13.

“The benefits of identifying root causes of denials, denial identity and resolution and fewer write-offs seem to outweigh any challenges with vendor solutions, leading to higher overall satisfaction with solutions in use,” wrote the authors of the report.

The survey also showed that adoption rates for automated and vendor-sponsored solution may be set to increase in the next year.

For participants that did not have a vendor-provided solution, about 60 percent stated that their organization plans to purchase a claims management solution in the next seven to 12 months. Most other respondents in this group reported that they would acquire a solution in the next six months.

Researchers at HIMSS Analytics explained that healthcare organizations should consider a more automated approach to claims denial management, especially as value-based care models begin to overshadow traditional fee-for-service structures.

“The transition from volume to value-based care and the use of alternative payment models could have a significant impact on the denial management process, depending on which type of APM is in use,” stated the authors of the survey.

“However, this transition is not going to happen overnight.  Organizations will need to rely upon these solutions and processes and continue to collect payments until the move to APMs has been established on a larger scale across the healthcare industry.”

With the onset of value-based care, claims management has become a little more complicated for some healthcare providers. Not only are revenue cycle management policies dependent on how many services are performed, but providers must also track quality and cost data to maximize claims revenue.

A 2015 study from NextGen Healthcare Information Systems explained that outsourcing revenue cycle processes, such as claims denials management, could help providers focus on quality care rather than revenue cycle best practices.

“They [providers] are reimbursed on a transactional basis and they see as many patients as they can to generate revenue,” said Monte Sandler, NextGen RCM Services, in March 2015. “Their expertise is in patient care and, quite honestly, nobody prepares them for proper coding, proper billing, and collections. It’s always on the back of the list.”

Automation could be a viable for solution for most providers, especially as claim denial rates are rising due to an increase in integrity programs from CMS. Vendor-provided systems can streamline the documentation process as well as identify issues with claims that need to be solved before submission.

With an automated claims denial management system, providers may also be able to monitor denial rates and reasons. This could help organizations resolve recurring issues.

As the HIMSS Analytics survey showed, more healthcare organizations are considering vendor-sponsored claims management programs to facilitate the transition to value-based care. With this shift in the industry, providers must rely on more data in order to get paid and an automated solution may be the answer to handling all the information in more meaningful ways.

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