6 Dec

Denials: The Growing Concern

Denials are a fact of life for every medical practice. From demographic errors to medical necessity, denials come in easy to fix solutions and time-consuming levels of appeal. A recent article from the Healthcare Finance News website (http://www.healthcarefinancenews.com/news/denials-still-major-risk-revenue-cycle-departments-despite-build-out) noted that hospitals in particular “wrote off as uncollectable 90% more denials than 6 years ago.”

The news is not all negative though. The article notes that “Medicare and Medicare advantage [plans], the rate of successful hospital appeals increased from 50% to 64%.” This deals with a trend towards more appealable medical necessity denials and less front-end demographic and authorization denials. They also noted that “Hospitals in states with Medicaid expansion…produced better performance on bad debt…” The caveat to that is “the rise of high-deductible health plans has led to an increase in unpaid patient obligations across all states.”

So, what is a practice to do?

Focus on upfront collections

Firstly, a strong focus must be placed on up front collections. This means your registration area needs copies of fee schedules and access to full patient eligibility to best estimate patient expense. Work with patients ahead of time to establish payment plans or collect payment in full at the time of service.

Build a strong AR follow-up team

Second, your practice needs a strong AR follow up team. This team should be experienced in following up on unpaid AR greater than 60 days and be versed in writing in-depth appeals according to payor guidelines. If you don’t have this in house, consider outsourcing your AR greater than 60 or 90 days to a firm that specializes in this type of collections.

Follow-up on denials in a timely manner

Lastly, make sure your denials follow up is done timely. Check your contracts – most payors have a 60 to 90 days appeals window from the date of the remit. If your follow up is not done within that timeframe, your practice will be looking at writing off potentially collectable charges by simply not following up. This may again be a reason to outsource your older AR to specialists used to working by payor specifics and timelines.

While denials write offs are growing, there are things your practice can do to reduce those write offs. If your practice needs help with collections, contact us at Legacy Consulting to help your practice collect those older balances that may still yet be collectible!

Donna White

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