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

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5 Claims Denials Management Conversations From 2015

The healthcare industry learned many key claims denials lessons as 2015 unfolded, especially as ICD-10 implementation came and went. The conversation continues onwards.

By Jacqueline DiChiara

- This year, the healthcare industry lived in denial. Claims denial, that is.

Claims denials management healthcare providers

Claims denials management dialogues were extensive and recurring among healthcare providers across the industry this year. 

Here are 5 claims denials management topics healthcare providers concentrated on in 2015 that will likely continue to remain as key focal points well into next year.

We focused on the importance of training

“Primary focus for 2015 is stressing to customers the impact ICD-10 will have on them financially and training them on reports and processes required to manage the denials and rejections once ICD-10 occurs,” said Douglas Kegler, CEO and Founder of CollaborateMD, to RevCycleIntelligence.com, last March.

READ MORE: Top 4 Claims Denial Management Challenges Impacting Revenue

Revenue cycle management should be discussed in direct association with increased education and greater training efforts, he stated.

We waited for ICD-10 claims data to come rolling in

As last October came to a close, the Centers for Medicare & Medicaid (CMS) announced the total amount of claims denied was around 10 percent.

Out of 4.6 million total claims submitted per day, 2 percent were reportedly rejected due to either incomplete or invalid information, CMS confirmed. A reported 0.09 percent of total claims were rejected because of invalid ICD-10 codes; 0.11 percent were rejected because of invalid ICD-9 codes.

We paid attention to denial estimates

READ MORE: CMS Pauses Home Health Pre-Claim Review Demonstration

This year, we learned that denial management outsources some accounts receivable and collections 55 percent of the time, according to research from Black Book.

"Claims management appears to be the next for vendor opportunity as ICD-10 effects begin to impact cash flow, followed by eligibility and benefits management," stated Doug Brown, Black Book’s Managing Partner.

The industry average regarding denial rate perhaps depends on who you ask. It may be between 5 and 10 percent, according to research from the American Academy of Family Physicians (AAFP). Other estimates are much higher. Up to a quarter of claims are denied, according to another study from the Government Accountability Office.

The reason the healthcare industry has trouble pinpointing claims denial rates may be tied to regulation gaps.

“The wide variation in how often health insurers deny claims, and the reasons used to explain the denials ... indicates a serious lack of standardization in the health insurance industry," said the American Medical Association.

READ MORE: 3 Best Practices for Hospital Claim Denials Management

Although there is indeed quite a difference between 5 percent and 25 percent, the fact of the matter is the healthcare industry was honed in this year – especially regarding ICD-10’s kickoff last October – on the root cause of denials

We expected denial rates to skyrocket

“I fully expect denial rate to go up. The question is, will they blow up when they go up? Will it be so much that you're not prepared to handle it?” said Joshua Berman, Director of ICD-10 at RelayHealth Financial, to RevCycleIntelligence.com last November.

“Providers were able to bill claims. If you talk to almost the entire industry, the huge concern was if the hospital staff was trained to produce ICD-10s. The answer was a resounding yes.”

“Would payers be able to accept these claims into their system? The answer was a resounding yes. That's huge news.”

“We are finding solutions ahead of time instead of sitting in our disparate little boxes not talking. A lot of the reasons why we haven't had any problems is as simple as preparation across the spectrum.”

Last September, 94 percent of surveyed billing managers, practice executives, etc. anticipated their denial rates shooting up in October. Only 30 percent said they had worked effectively to advance their denial management processes. Over a quarter of surveyed healthcare organizations confirmed they were fearful a lack of payer preparation would mean payment disruption later in the year.

We paid attention to outliers and trends

Revenue cycle leaders must be on the lookout for outliers or trends that indicate shifts in payment or denial patterns,” asserted Karen England, MBA, CPC, Revenue Cycle Consultant at Ingenious Med, to RevCycleIntelligence.com last March.

“As the industry becomes comfortable with submitting and processing claims in the ICD-10 code-set, I believe payers will become smarter and more aggressive in pending claims for documentation in order to support medical necessity.”

Healthcare providers will continue to struggle with increased performance and limited resources, and must strive for efficient and effective workflows,” England stated.

“Having immediate access to data and being able to respond to opportunities as they arise is a big help.”

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