First Steps for a Denial Prevention Framework

Jul 5, 2022

According to U.S. Healthcare Denial Management Market, a study conducted by Research and Markets, in 2021, the U.S. healthcare denial management market size was valued at $3.57 billion. By 2027 it’s expected to grow an additional 66% and reach $5.94 billion. Denial management can leave millions, if not billions, of dollars on the table if left untouched. Starting a new or restarting a lapsed denial prevention system can be labor-intensive up front but leads to increased revenue later. Prioritizing how to recover revenue, handle the current denial workload, and learn denial prevention tactics for the future should be a top concern for many hospitals and health organizations. Creating and engaging in overall claims analytics is an excellent first step. Engaging in widespread claims analytics can look different based on each organization, but broadly, it introduces demonstrable tactics, staff reallocation, and technology implementation.

Conducting a Comprehensive Root Cause Analysis

Not all denial prevention strategies are created equally, but they can all have their time and place. Front-end denial management strategies are highly recommended in the industry because they aim to avoid denials entirely instead of spending resources on the back end to combat denials. Root cause analysis is one of the most popular front-end strategies, and for a good reason.

To perform a comprehensive root cause analysis, start with utilizing the assessments from the first step and analyze the data to determine the root cause(s) contributing to your denials. It’s helpful to start at the beginning of the patient encounter. For example, documentation errors at intake are one of the most common root causes for denials. Siloed technology, incomplete training, and lack of resources are common, valid root causes for denials. Determining the source of the issue lays a foundation for solving these problems and reducing denials on the front end. Implementing systems to prevent denials early in the revenue cycle and the clinical process will be more effective throughout the claims management process. Resource-heavy processes on the front end aren’t always sustainable for organizations in the long run. Fortunately, outsourcing options exist for companies looking to improve their denial management processes.

Finding the Right Team

Finding the right team doesn’t mean you need to spend a lot of money on new hires. In many organizations, your current team may have twofold skills; for example, many RNs double as their hospital’s clinical denial specialists. With the current staffing shortage, many companies struggle to keep up with the demand for claims authorizations and audits. They’re opting to reallocate their current staff into different positions, but this can lead to increased pressure on clinical staff, leading to burnout and increased staff turnover, which can be costly for the hospital. This increased pressure can also lead to more mistakes, which increases denials.

Reallocating current or potentially outsourcing staff is a viable option to ease some of these pressures and increase your denial prevention strategy. The reallocation of non-clinical staff to denial management positions is ideal if there is enough staff with the skills to take over short-term while clinical staff focuses solely on patient care. Understandably, some organizations don’t have the resources to have an internal billing and coding team; outsourcing is becoming a popular option for these organizations to assist with the denial prevention system. Outsourcing can help decrease your staff turnover rate while maintaining the quality of work. Additionally, outsourcing is usually less expensive than having an internal billing and coding team, plus third parties may come with technology and a unique clinical perspective.

Technology Implementation

Technology is one of an organization’s most beneficial denial management and prevention tools. Creating intelligent workflows will allow your team set up predictive templates for effective appeals. An analytics-driven approach to revenue integrity reduces human intervention, leading to less workload for your clinical denials team. By automating high-volume, low-risk denials, you can increase the time your clinical denials team has to work on more time-intensive tasks. For example, automating the closing of duplicate denials reduces the time your team spends on that tedious task. Nurse teams with years of experience and various healthcare designations, experience with different EMRs, and more work together to take technology solutions to the next level.