Claim denied rubber stamp.

Know Why You Don’t Get Paid and Mitigate Denials, Permanently.

By Ray Jorgensen, CEO and Co-Founder of RevenueHealth

Too much to do and too little time to dive deeply? Every “C” level professional in any industry is overwhelmed with problems to solve and often an abundance of data. What to do with so many issues and so much information becomes the real question.

In the healthcare revenue cycle, understanding why you don’t get paid and really learning from denials may be an opportunity to not only elevate cash flow but fix certain issues, permanently. Every explanation of benefits (EOB) or remittance advice (RA) offers volumes of learning. Reading the last page of every EOB/RA, you find a legend of denial reasons. Following are a few incredibly common denial reasons and simple, yet effective, suggestions for permanently preventing their recurrence.

  • Credentialing. Too often billing finds out a new provider has been hired when an unknown name shows up in a claim batch or an EOB/RA is filled with denials stemming from the new provider not being enrolled with your organization’s top health plans. The Pareto Principle supports that 80% of your money is derived from 20% of your payers/plans. When hiring a new doc, NP, PA, etc. here are some ideas to expedite credentialing.
    • Tie their compensation to successful enrollment. In other words, withhold full pay until they are fully credentialed with your top plans. Believe me; they will be motivated to get it done.
    • Either designate two people (the second for redundancy) who become internally expert at the credentialing/enrollment process with your top health plans. If you can’t find the right people to optimize this challenging process, hire an outside firm.
    • BEFORE your new provider starts seeing patients start the enrollment/credentialing process. Waiting until they start seeing patients almost assures months of non-payment for covered services.

DON’T ever bill the new provider under another provider’s NPI. Justifying this because “everyone else does it” does not diminish you, the provider, or the billing folk knowingly filing a “false claim.” Unless a health plan, in writing authorizes this practice, it is fraud. Period.

  • Eligibility. Patients should be responsible for knowing what health coverage they have. However, what should vs. what does happen is not the same thing. Your front desk staff win or lose this battle. You can’t train them enough. We encourage job sharing with billing so your billing team can see what life is like at the front desk and the front desk can fix the denials they cause. This is not retribution but education. The focus is teaching the front desk how to improve their job function to optimize income.  Sometimes this happens with financial incentives (e.g., reduce eligibility denials by X% for free movie tickets or a pizza party). Sometimes it happens by employing “broad-banding” which is overcompensating top performers who mentor and bring along under-performing colleagues. Regardless, be creative and elevate learning that translates to more optimal performance.
  • Demographics. Like eligibility, this pitfall can be avoided through improved front desk learning. Make certain patients are asked for their actual address, contact phone, insurance, etc. vs. responding yes/no to “Is everything still the same?”
  • Prior-Authorization/Referral. With the rise of “value based” compensation, capitation and/or risk sharing contracts are once again on the rise. Patients are assigned to a PCP unless they choose one and too often they don’t even know a PCP is required. Your front desk must know how to help patients convert to a PCP working at their office location or under the umbrella of your TIN/EIN. If not, they MUST understand how to get permission prior to the visit (i.e., prior authorization or referral) or you run the risk of not getting paid. Again, job sharing and constant educational (not retributional) dialogue between the front desk and billing will win out. It takes time, persistence, and creativity.

If you’ve not thought about investing in a software product to “roll up” denials across all payer, it is something you should consider. Cost effective and powerful software will afford your team the ability to drill down to the location, provider, and payer to detect patterns so you can spend time fixing things vs. finding out what’s wrong.

Denials are part of the revenue cycle process. From the very early days of my career as an employee at United Healthcare and Blue Cross Blue Shield, we were taught that most practices don’t work AR or fix denials. Simply stated, denying claims makes the health plans/payers money because many remain unpaid and unworked. Be vigilant and get the money owed to your organization. Aggressive persistence on these key areas will see days in AR shrink, per encounter/procedure payment elevate, and overall income stabilizes. Overtly choose to mitigate denials to grab the full share of the revenue cycle pie owed to you.