Getting Paid Faster: 3 Pillars of Denial Management, Part 2
Written by: Cheryl Reifsnyder, PhD
With the continuing shift toward value-based contracts in healthcare, revenue cycle operations are becoming increasingly complex, with increasing pressure to provide documentation to support claims—all of which have the potential to decrease cash flow and negatively impact a practice’s bottom line. According to a recent Healthcare Information and Management Systems Society (HIMSS) survey, more than 3 out of 4 healthcare leaders (76%) reported denials as their greatest challenge in the process of submitting insurance claims.
In our last blog post, we introduced a framework that practices can use to help improve their Denials Management and, in the process, help reduce the number of denials they’re required to field: a framework called People, Process, and Technology (PPT). Introduced in the 1960s, the PPT framework has been used since then by organizations in many different industries, with the common purpose of providing structure for improvement. We looked at the importance of People and Process in our last post; here, we’ll look at the final element, Technology, and how these 3 elements can act as the pillars of Denial Management.
Technology
Technology is what gives the People in your practice the tools they need to implement the Processes they’re responsible for performing. It is often used to help automate various steps in those processes.
Technology is an element that can potentially improve the effectiveness of your processes. Of course, by itself, technology cannot solve all your problems—it must be combined with the right people, people who have the right knowledge and the right processes in place, for that technology to be used effectively. However, when you combine technology with the right people—those with the right skills, knowledge, and experience—and the right processes, it can be a valuable tool for improving your Denial Management outcomes.2
For instance, 31% of healthcare providers use a manual process for managing denials—but the right technology solution can help you easily manage and track claim denials. It can also allow you to sort denials by billing, coding, and front-office errors. By separating out the different types of errors leading to denials, you become better able to identify which stakeholders you need to work with to address each issue.
Technology is critical for enabling you to drill down to discover the root cause of denials. Until you discover the cause underlying your denials, you will effectively have to keep working the same denial over and over; when you identify the source (or sources) of your denials, you gain the ability to retrain practice areas that are contributing to those denials.1
Technology can also provide the ability to compare your Denial Management performance to nationwide averages and peer statistics—valuable knowledge for understanding your strengths and weaknesses and for identifying areas where changes need to be made.1
Best Practices for Optimizing Your TECHNOLOGY2
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Use a solution that can easily manage and track claims denials.
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Use a solution with the ability to sort denials by billing, coding, and front office errors.
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Evaluate your performance by comparing your results to nationwide averages and peer statistics.
Robotic Process Automation (RPA)
Technology improvements can also include Robotic Process Automation (RPA). RPA is a special type of software designed for use with data and rule-based processes and designed specifically to take over or supplement work on repetitive tasks normally handled by staff. RPA differs from more advanced types of intelligent automation, such as machine learning; it’s less complex and, as a result, lower cost and easier to implement.
The number of days claims remain in A/R can dramatically impact a practice’s cash flow—but the rate at which denied claims can be processed is frequently constrained by the capacity of your medical billing team. However, RPA can complete repetitive tasks—of which there are many in the Denial Management process—more efficiently and with fewer errors than a human worker. It can provide reliable, speedy, and economical labor to decrease the number of days a claim remains unresolved; or to address the recovery of revenue that might otherwise have been written off—all while contributing to better data quality and improved compliance with federal regulations.
Given that 30% to 40% of healthcare claims result in edits or exceptions that could lead to denials, RPA is a valuable tool for helping with tasks to help prevent such errors—tasks such as identifying potential issues, facilitating claims review, or quantifying and categorizing past denials. Research from KPMG suggests that RPA could help reduce revenue cycle costs by 25% to 40% for healthcare systems.
Be aware that billing staff may fear that adding RPA could lead to loss of their jobs. It’s important to educate employees on both the benefits and limitations of RPA. It’s true that RPA can operate 24/7/365 at a fraction of the cost of human labor; but in healthcare, RPA is not a substitute for human staff. Instead, it’s a tool to help staff to perform work accurately the first time, every time. It’s also a tool to allow staff to focus on other types of work, activities that will allow them to contribute in higher-level, more significant ways.
Putting it all together
The key to applying the PPT framework to improving Denial Management in your organization? It’s all about balance. You need the right Technology to access the necessary information for optimizing Denial Management, and that information will enable you to support your People and optimize your Processes.
For instance, your current revenue cycle solution should allow you to generate a Denial Summary. Using this report, start with high-level denials information, then drill down to create actionable data:2
- A high-level Denial Summary can provide insights about the source of denials.
- Sort denials according to cause—billing errors, coding errors, or front office errors—to help you pinpoint workflow inefficiencies.
- Evaluate the most common sources of denial by payer, procedure code, provider, and location.
Next, review a Denial Details Report—the Denial “Deep Dive.” This report can show denial rates by category, remittance code, payer, CPT code, and location, which can help you identify specific problem areas. This report also drills down within claims to provide details on a particular patient or charges for that patient.
This process generates insights and root cause analysis of denials. The resulting information can be used to create improved, more efficient workflows (targeting Process); and to identify areas where focused training is needed to help eliminate errors and implement new processes (targeting People).2
Finally, take steps to optimize your Technology in ways that will help prevent denials, or help identify denial sources. For instance:
- Flag appointment types requiring authorization.
- Enable system rules to identify claims with flagged procedures.
- Drill down by location to see if location is affecting denial rates.
Solutions utilizing the PPT framework
The PPT framework forms the foundation for Veradigm®’s Revenue Cycle Services solutions. Veradigm Revenue Cycle Services serves your practice with professional billing experts who partner with you at every step of the revenue cycle to help ensure accurate billing and coding. Our team delivers a comprehensive approach for improving your practice’s financial health, one that addresses the People, Processes, and Technology involved.
As a result, our Billing Services team delivers outcomes such as1:
- 98% net collections
- 98% first-pass clean claims rate
- 2% to 5% average revenue improvement
Veradigm also offers RPA for automation of rule-based processes that have2:
- Standard readable electronic output
- Highly manual and repetitive processes
- Low exception rates
- High volume and low complexity
- Requirements for performance by large teams
- “Swivel-chair” components requiring the same data to be manually entered in different systems
Our RPA programs have resulted in outcomes such as:3,4
- Quality improvements: Robots perform with improved accuracy and consistency, as they don’t make mistakes and don’t vary their processes, always following the rules.
- Increased productivity: Available 24/7/365, robots provide increased throughput; at the same time, they can backfill for under-resourced teams and enable staff to focus on higher value, more engaging work.
- Lower costs: Robots can be assigned to work with any team, on any project, optimizing resourcing and decreasing the requirement for subcontractors.
Veradigm’s RPA can give a boost to both the Technology and Processes involved in Denial Management, while providing support for your Denial Management team—enhancing all 3 pillars of Denial Management for your practice.
Contact us to learn how Veradigm’s Revenue Cycle Services or Veradigm’s RPA solutions can help improve Denial Management for your practice.
References:
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Veradigm 2021, Internal Data on File. Individual results will vary depending on circumstances.
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Veradigm June 2023, Internal Data on File.
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Veradigm 2021, Internal Data on File.
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Veradim May 2023, Internal Data on File.