As healthcare providers struggle with multiple headwinds, from rising labor shortages to declining reimbursements, they must recover the most from their revenue cycle. Claim denials, a chief cause of revenue loss to healthcare practices, are rising across payer types. A primary source of denials is on account of coding-related denials. A comprehensive and focused denial management and appeals strategy will help reduce this revenue loss.

Reasons for revenue loss due to clinical and medical coding issues

Revenue loss due to clinical and medical coding issues in the revenue cycle is as follows:

• Medical coding professionals are in high demand. When a hospital or medical practice experiences financial difficulties from a lack of proper documentation, it often suffers from DNFB (discharges not fully billed) and NPBs (neurology physicals not billed). This occurs when physicians fail to document all procedures performed, which leads health care organizations to lose revenue. By analyzing DNFB issues and helping healthcare clinicians determine why this may be happening, we can improve patient satisfaction and safety.
• Coding errors are one of the leading causes of denial from healthcare payers. Coding quality issues can cause downstream denials and lost revenue. To avoid this, healthcare providers must invest in a coding audit function that not only checks for coding errors but also improves coding quality.
• Clinical Validation Densities are required for all clinical investigations and procedures. Clinical validation denials occur when the medical coding personnel have not received adequate documentation from the physician. The process of providing compelling clinical documentation helps to eliminate invalid clinical validity, which leads to increased revenue and reduced denials.

An approach to successfully appealing clinical and other denials

Denial management and prevention require effective collaboration across functional areas and ongoing discussions to eliminate the avoidable causes of denials. When denials do occur, medical practices and hospitals must follow a concerted and collaborative appeals strategy that includes the following: Assigning a responsibility for denials to an individual within the medical group; Having designated individuals to create a plan of action; Gathering information from management and operations personnel; Conducting research as required; Developing a plan of action at regular intervals; Ensuring that all recommendations are followed up on by appropriate individuals

• Denial management requires organizational collaboration between medical billing and coding, clinicians, and coding experts. Denial rates are often rooted in clinical coding quality and validation reasons that require collaboration between coders and physicians. Clinical documentation improvement (CDI) and coding teams must work with physicians to bring out clinical evidence to support the appeal strategy. A regular cadence of meetings between the coding and CDI staff can help improve the quality and specificity of coding.
• Create a cross-functional team for denial management, having everyone play a role. RCM personnel, CDI team members and clinicians must work together to bring up denials for a discussion. Each denied claim provides the learnings for the future. A cross-functional team can work towards building systemic checks or just correct the actions that can trigger denials.
• If a patient appeals a denial, the healthcare organization will spend valuable time responding to the appeal and trying to obtain clarifying information from its functions. By templatizing responses, the denials management team can spend more time on quality improvement and reducing appeals handling times. Healthcare organizations may find it more efficient to outsource denials management and coding functions in order to increase clinical coding quality and appeal turnaround time.
• Learn from successful appeals and document these as cases for reference. For Coding related denials, check the clinical validation and coding accuracy through additional references from AMA and AHA’s guidelines and tools.
• Promote a learning culture. An effective denials management program has its anchoring in continuous learning. All stakeholders – front-end staff, clinicians, HIM, and coding personnel – must meet and collaborate to create organizational learning opportunities specific to the type of medical services provided. These programs should focus on patients’ needs and control process improvement efforts by providing benchmarks for continuous improvement.

Medical billing outsourcing can help healthcare organizations manage coding and denial management. By shifting focus from denial management to denial prevention, it’s possible to realize up to $20 million in savings annually.

Healthcare providers must train staff members on the insurance verification processes. Efficient processing reduces the likelihood of denials and accelerates the cash flow cycle.