Clean Claims Tips
by Karen Bowden, Senior Vice President, Craneware InSight Consulting
Today, properly submitting a “clean” claim is no easy task for any health information management department.
Intricate Health Insurance Portability and Accountability Act (HIPAA) regulations, coding requirements, and other protocols create an environment in which submitting claims is a delicate, time-consuming process. As a result, a typical U.S. hospital loses between 7 and 10 percent of its deserved revenue to denied claims that could have been easily corrected and resubmitted, according to the Healthcare Financial Management Association (HFMA) Payment & Reimbursement Forum.
Many hospital organizations simply do not have the structure in place to effectively manage denials and avoid recurring denials. This problem is so pervasive that hospitals lost $1.7 billion in denied claims in 2010. Today, a hospital able to keep its denied claims to fewer than 4 percent is considered successful.
Karen Bowden, a 30-year industry veteran and “go-to” contact for many CFOs whenever fiscal problems arise and additional revenue is needed, offers answers for hospital administrators seeking to effectively manage claims denials and provide a boost to the revenue stream. Featured below are her five-step strategies to fix denied claims and substantially prevent recurring denials.
A typical U.S. hospital loses between seven and ten percent of its deserved revenue to denied claims that could have been easily corrected and resubmitted.
Five Steps to Correct Rejected Claims
Goal: To be paid for claims already denied
Step One: Identify owners—determine who is responsible for resolving the various types or categories of rejections.
Step Two: Distribute rejected claims to owners—quickly assign rejections to the appropriate person for follow up and resolution.
Step Three: Embed knowledge into the system—once work has been distributed, ensure that the responsible parties know the appropriate steps to correct the issues.
Step Four: Track and report on “un-worked” claims—regularly identify which rejections have been distributed for resolution but have not yet been resolved.
Step Five: Track “worked not closed” claims—review which rejections have been corrected but still have not been fully paid.
Five Steps to Prevent Recurring Rejections
Goal: To reduce the number of claims denied going forward
Step One: Collect and aggregate rejection data—pull in and categorize all rejection data to achieve full visibility into your denials management process.
Step Two: Trend significant issues by payer and reason—identify the top reasons for rejections and the top issues across payers.
Step Three: Perform root-cause analysis—drill down into the specific rejection details to identify the underlying causes of rejections.
Step Four: Develop and implement corrective action plans—implement action plans that attack the root causes of denials and reverse denial trends.
Step Five: Monitor, measure, and report—be vigilant, and regularly and repeatedly monitor your rejection trends to ensure your corrective actions are effective.
Karen Bowden is Senior VP of Consulting at Craneware InSight, in Needham, Mass., and a member of HFMA’s Massachusetts-Rhode Island Chapter. To contact her, email kbowden@claimtrust.com.
