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Medical claim denial management is a conversation throughout the healthcare ecosystem. About 10% of all medical claims are denied, representing $262B. Of that 10% of denial claims, 90% are preventable, according to an Advisory Board study.
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MEDICAL CLAIM DENIAL MANAGEMENT: HOW AI-BASED TECHNOLOGY CAN SOLVE A $262B PROBLEM

Medical claim denial management is a conversation throughout the healthcare ecosystem. About 10% of all medical claims are denied, representing $262B. Of that 10% of denial claims, 90% are preventable, according to an Advisory Board study. The biggest concern with denials is that it’s not something that has an easy answer. It’s complex, as there are many reasons for denials; however, there are many proactive measures you can take to reduce your denials, including the use of AI-based technology.

CLAIM DENIALS: WHY THEY HAPPEN

Claim denials are a normal part of operating in the healthcare space. Understanding why they happen and creating strategies and using tools to prevent them can change the game. But what’s the root cause of most denials?

That’s a tricky question. We don’t have standardization around denials, even though the AMA has petitioned for this. Public payers typically have higher claim denials than private payers. Payers are reluctant to provide data on claim denials to providers, which would, of course, help you discern why they happen.

Gathering your own data is possible; however, many providers still depend on manual processes when it comes to medical claim billing. More complete data sets would certainly bring greater insight, but we do have a good idea of what the most common reasons are:

  • Missing information (lack of or incorrect patient data or technical errors)
  • Duplication
  • Service previously adjudicated
  • Services not covered
  • Time limit has elapsed

Even though many of these are preventable, they still occur on a routine basis, which leaves providers absent of needed payments or substantial delays in those payments.

WHAT CAN YOUR PRACTICE DO TO REDUCE MEDICAL CLAIM DENIALS?

medical claim denial

While not all denials are preventable, having a robust medical claim denial management process in place can reduce them. It’s prudent to take a proactive rather than a reactive position here.

There are some specific steps to take to reduce your denials:

  • Access to accurate billing codes: Medical billing codes are not static. In fact, in 2020, there were significant changes to ICD-10-CM coding.
  • Collect your own data on denials: Track your denials and determine root causes, then develop a plan for corrective action.
  • Check benefits for patients: Not every procedure or service requires preauthorization; however, it’s imperative to make sure a payer does provide the benefit. It’s usually quick and easy to do this and can prevent future headaches.
  • Capture charges at the moment: By using a mobile charge capture app that gives you access to all appropriate billing codes, the time to bill is reduced. Charges also aren’t missed or entered incorrectly, which can happen with paper-based processes. Using such a tool also ensures claims are not late or duplicated. Such an application also delivers legible charges and facesheets with all the pertinent information.

Beyond these practical actions and tools, there’s an even more effective approach on the horizon—artificial intelligence (AI). AI is already in use throughout the scope of healthcare. Intelligent coding is possible with DocCharge CodeMed feature, that streamlines coding, reduces claim denials and increases practice revenue. It works as a tool to streamline coding requirements, including CPT to LCD, LCD direct searches, CPT to ICD, and ICD smart searches. Use of natural language processing (NLP) technology can improve this tool further and help medical billers and physicians bill for medical service according to insurance requirement appropriately without the risk of claim denial.

Technology can reduce challenges in medical billing. Investing and adopting it could help you increase cash flow, eliminate most of your denials, and provide seamless workflows. Explore how you can leverage this by trying DocCharge for free.

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