Top 3 Ways Payers and Providers Can Reduce Claim Denials

August 25, 2016 - When it comes to medical claims management, healthcare payers and providers will need to communicate more effectively so that both parties are on the same page when it comes to claim denials. Healthcare payers should know that communication is key when denying any claims. Quick and efficient data transfer will also be necessary. Below we outline some other ways to ensure that the reimbursement cycle runs smoothly and providers aren’t left with few resources.

Staff management

When addressing claim denials, it is vital to properly manage the team working in the medical billing department, according to Michelle Tohill, Director of Revenue Cycle Management of Bonafide Management Systems. If a staff member forgets to measure a clinical procedure or commits another error, this would likely lead to more claim denials. This means that creating more clarity and spelling out the policies that employees must follow will likely reduce error rates.

For example, any reimbursement requests from payers must be diligently and quickly followed up with. It’s vital to track the rate of claim denials and strive to improve performance in this area, wrote Tohill. Healthcare payers will also need to work with providers to quickly and efficiently complete any medical claims. More effective communication should allow payers to create more efficiencies in their reimbursement cycle.

Invest in new technologies

In order to share data more effectively between payers and providers, it is important for healthcare payers to invest in new information technologies. The health IT field has been growing tremendously in recent years and healthcare payers could benefit from this growth by improving their reimbursement cycle with the use of automation technology. The United States share of the North American payer IT field is expected to grow 5.8 percent annually between 2013 through 2018, according to a study from ReportsnReports.

With some health payers experiencing data security problems as seen by Centene, which lost six hard drives this past winter, it is key for healthcare payers to adopt more recent health IT products that contain sufficient privacy and security controls. Kimberly Branson, the ‎Vice President of Business Architecture & Strategy at health insurance company Medica, discussed the importance of health IT in the health payer industry.

“Information technology is an imperative for payers. From a core administration perspective, the core responsibility of a health plan or a payer is to finance healthcare,” Branson stated. “The way that it’s done is pretty complex between the payer and the provider. Having information technology that helps to automate workflow and automate the transfer of information within and in-and-out of a health plan is critically important. In an age where the industry is becoming even more and more focused on government oversight and compliance, improving automation improves quality, which improves your plan’s capability on ensuring compliance as well.”

“Technology, from my perspective, is as important as the people and is as important as the process,” concluded Branson.

Keep track of coding

When providers are attempting to avoid claim denials, it is key to better manage their medical coding especially after the new ICD-10 code transition. With more codes affecting the payer-provider relationship due to the ICD-10 implementation, providers are advised to monitor the entire claims process more carefully. This essentially points toward the importance of tracking medical coding.

Before claims are sent to the payers, it is important to fix any potential medical coding issues. This will ensure providers are fairly reimbursed for their healthcare services. Setting up alert systems showing exactly why a claim has been denied and which coding errors occurred could be helpful for medical billing departments.

However, it is important to note that the ICD-10 transition has actually been relatively successful and healthcare providers have not experienced many significant setbacks with adopting the new diagnostic coding system. For example, a report from KPMG shows that, out of 298 health IT professionals, 80 percent have experienced a high level of success with implementing the ICD-10 codes in their medical organization.

“If you talk to almost the entire industry, the huge concern was if the hospital staff was trained to produce ICD-10s. The answer was a resounding yes,” Joshua Berman, Director of ICD-10 at RelayHealth Financial, told RevCycleIntelligence.com.

“Would payers be able to accept these claims into their system? The answer was a resounding yes. That's huge news.”

“We are finding solutions ahead of time instead of sitting in our disparate little boxes not talking. A lot of the reasons why we haven't had any problems is as simple as preparation across the spectrum,” Berman concluded.

Healthcare providers and payers who follow these three tips for improving medical claims processing are likely to experience fewer claim denials and see a more thorough and efficient reimbursement cycle. As payers and providers bring more focus to value-based care, the future may have these two parties working more closely together to bring healthcare costs down and strengthen the reimbursement process.

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