Denials Bleed You: Four Ideas to Fix It

Karen Minich-Pourshadi, for HealthLeaders Media , January 25, 2010

With neither the government nor other third-party payers about to change their processes, it behooves CFO to do more than encourage the team to simply refile rejected claims—actually that's a waste of time, effort and in the end dollars. Suska suggests that financial leaders "begin at the end" and look at the back office. Your business office should analyze the denials reports generated which can then be categorized by code, cause, or department—your task force will determine what data is most useful.

"Vigilance is key; you're looking for preventative measures to put into place and you also need to constantly be aware of any industry issues that may affect your claims, such as RAC. It's really never-ending," says Suska.

3. Consider automation.
Because claims denial is so unrelenting, it's worth investing in automation to track it. Think you can't afford it? If your facility is bleeding hundreds of thousands annually due to denials you have no choice or the facility could land in the red when reimbursement changes occur.

"It is very labor intensive to track and report on denials manually," Suska notes. "Consider investing in an automated tool."

Keep in mind, whether you use manual or automated processes for denials and underpayments, this process should always be the responsibility of numerous people at the hospital.

4. Know when to hold 'em and when to fold 'em.
Even organizations that have sophisticated denials management programs get denied, so knowing when to appeal a denial is equally important. Suska recommends culling a sub-committee from the task force and establishing monetary guidelines for determining which denials to focus on. The appeals process may also help you uncover whether any documentation issues need to be addressed.

Legislation and third-party payers are frequently changing and either of them can have a profound affect on your hospital's bottom line. While you cannot ignore these two critical elements, it is vital that your organization make every effort to get all the dollars you are owed while working within their defined perimeters. Reducing your claim denials and underpayments is a long-term approach to keeping your hospital financially sound.

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Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.

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