Using Data Analytics to Decrease Claims Denials, Boost Revenue

September 12, 2016 - Claims denials typically represent one of the largest revenue cycle bottlenecks in most healthcare organizations.  However, slowing down to determine why claims are being denied hasn’t traditionally been an option.

The light at the end of the tunnel isn’t due to a slower pace - rather, revenue cycle leaders have started to leverage data analytics tools to drive toward simplifying denials and the complex claims management process.

With the many types of technologies available to support your business intelligence (BI) strategy, it’s important to understand the specifics of how various reports or other analytics tools can help.

Unlike rejections, which have a linear workflow because they require one task or set of tasks at a point in time, the denials workflow is more cyclical. This cycle can be different lengths and require varying steps, depending on the denial reason. It’s this type of complexity that makes denial management traditionally fraught with difficulty but so well suited for improvement.

As you develop a plan for leveraging analytics, it’s first helpful to understand three key types of reports available—and how they can help in your quest to decrease denials:

Analytics dashboards

Dashboards are with a core piece of any data analytics solution. They serve as an excellent starting point, and they are a great first view before you begin delving into root causes and potential solutions.

While dashboards can be helpful, they should be considered one tool among many helpful reports. Most likely, a general claims management dashboard would include the denial rate along with first-pass rate and clean claims rate.

Interactive reports

Interactive reports are especially useful for claims denial management because they enable viewers to click on a specific subset of information they need to see. For instance, if a revenue cycle director is initially reviewing a denial rate dashboard but wants to view a specific payer, he’ll click through to all denials from that payer.

Once in this view, however, he may want to view the payer’s denials for a certain CPT code. By supporting the viewer’s logic, and providing the specific information he wants to see, the interactive report supports the complexities and high level of details involved in denial management.

As you incorporate interactive reports into your claims denial management strategy, you’ll find numerous helpful ways to filter and sort so you can quickly determine the root cause of the denial and take action.

Claim-level data

The term “actionable information” is often associated with data analytics because healthcare teams don’t necessarily need more data.  Instead, they need data within the right context.

As the back office staff works claims, they’ll benefit the most from being able to see errors side by side with reported data. In addition to making the necessary edits and resubmitting the denied claim, they’ll benefit from on-the-spot training.

According to a recent data analytics and reporting survey, more than half (55%) of healthcare organizations do not have a data analytics and reporting solution in place to improve their revenue cycle.

However, 45 percent of those without a solution are in the process of looking for one. This affirms that healthcare organizations are realizing the benefits of implementing a robust data analytics and reporting program to help with financial success—notably the claims management process and revenue cycle.

As revenue cycle management teams at healthcare organizations are pressed to achieve excellence with fewer resources, data analytics can make all the difference. Particularly when part of an overall improvement strategy, data analytics can enable revenue cycle teams to uncover problem areas, make process improvements and avoid future denials.

The light at the end of the tunnel? Smoother, more productive claims management processes and a more financially healthy organization.

Jeff Wood is the vice president of product management at Navicure. You can follow him on Twitter @Jeff_J_Wood.