Summary: Claim denials are a growing financial burden in healthcare. This blog outlines six essential steps to improve denials and appeals management, reduce claim rejections, and recover lost revenue. Learn how a structured approach and expert support, like Xsolis’ Denial Resolution Services, can streamline your process and improve financial outcomes.
Key Steps Covered:
- Identify the denial type (hard denial vs soft denial)
- Conduct root cause analysis
- Prioritize denials strategically
- Execute a timely and thorough appeal
- Monitor and track appeal outcomes
- Implement preventive measures and consider outsourcing denial services to experts like Xsolis
Claim denials in healthcare are a persistent challenge, costing hospitals millions of dollars annually. With denial rates on the rise, revenue cycle leaders must adopt a more proactive approach to denials and appeals management.
In this blog, we share six structured steps to help reduce claim rejections in hospital and healthcare settings. Continue reading to learn how to implement procedures that will help your organization recover revenue and strengthen overall denial prevention.
Step 1: Identify the Denial Type
The first step in a streamlined denials and appeals management process is analysis. Revenue cycle professionals must first determine whether a denial is “hard” or “soft.” Let’s review hard denial vs soft denial below.
Hard Denials
Hard denials are final and typically non-recoverable. They often stem from issues like a lack of medical necessity or services not covered by the payer. These denials usually require a formal appeal process. If unsuccessful, complex denials tend to result in lost revenue.
Soft Denials
Soft denials are temporary. They most often occur due to correctable issues. For example, a claim may be denied because of missing information or a coding error.
Soft denials can often be resolved by submitting a corrected claim or additional documentation. That’s why they are sometimes referred to as “administrative denials.” Such denials can often be resolved with better workflows and oversight.
Understanding the type of denial is crucial for determining the appropriate course of action.
Step 2: Conduct Root Cause Analysis
Analyzing the root causes of denials is essential for effective denial prevention.
The most common causes include:
- Incomplete or incorrect patient information
- Coding errors
- Lack of prior authorization
- Services deemed not medically necessary
By identifying patterns and trends in denials, healthcare organizations can implement targeted strategies to address them.
Step 3: Prioritize Denials Strategically
Not all denials have the same financial impact. Prioritizing denials based on their fiscal weight can help allocate resources effectively. For example, focus on high-dollar denials from major payers. That approach may yield better returns compared to pursuing low-value claims with a low chance of recovery.
Step 4: Execute a Timely and Thorough Appeal
For denials that warrant an appeal, it’s important to act promptly and provide comprehensive documentation.
Adequate documentation should include:
- A detailed explanation of why the claim should be paid
- Supporting medical records
- Relevant coding and billing information
Timeliness is critical. Many payers have strict deadlines for submitting appeals.
Step 5: Monitor and Track Appeal Outcomes
Is your appeals process in medical billing as efficient as it can be? Tracking the outcomes of appeals provides valuable insights into the effectiveness of denial management strategies.
Consider monitoring appeal success rates and the average time to resolution. Likewise, tracking the common reasons behind appeal denials can help streamline processes for the future through a proactive approach. Ultimately, the more data you have, the stronger your continuous improvement efforts will be.
Step 6: Implement Preventive Measures
Prevention is the most effective strategy for managing denials. By addressing the root causes of denials proactively, healthcare organizations can reduce the incidence of claim rejections. As a result, they will improve their overall revenue cycle performance.
Consider implementing the following preventative measures as part of your proactive management strategy:
- Regular training for coding and billing staff.
- Implementing robust documentation practices.
- Utilizing technology to automate eligibility verification and prior authorization processes.
Additionally, some healthcare services may choose to outsource their claims denial services to an organization like Xsolis.
Partnering with Xsolis for claims denial outsourcing enables healthcare organizations to alleviate the burden of complex appeals. Denials will be handled by a team of clinical and legal experts with the correct core competencies. The Xsolis team’s decisions are supported by compliant, AI-driven insights backed by historical data.
Xsolis’ Denial Resolution service identifies denials with the highest potential for overturn and crafts compelling, specific appeal packages. Ultimately, its experts support organizations in accelerating reimbursement and freeing up their internal resources.
Explore how West Tennessee Healthcare partnered with Xsolis to recover millions in revenue.
Streamline Your Denials Process with Xsolis
Schedule a consultation with Xsolis today. Learn more about how AI-driven solutions can optimize your denials and appeals management strategy.