Revenue leakage due to claim denials and rejections is a significant concern for healthcare providers. In just one month of 2021, $262 billion worth of claims were denied out of the total $3 trillion, resulting in an average of $5 million per provider. Eligibility problems account for 24% of denials, according to a survey cited in Becker's Hospital CFO report. Additionally, a study by the American Medical Association estimated that the cost of insurance follow-up for registration issues is just under $19 per claim, meaning a practice can cut its administrative costs by $100 if it can decrease the number of eligibility denials by five each day.
The complexity of the medical coding and billing system is a common cause of claim denials, regardless of fault. To ensure accurate patient information and timely claim submission, healthcare providers must closely collaborate with their in-house or external medical coding specialists.
Experts suggest that improving front-end processes is an effective way to gain control over denial management. This includes timely identification of errors, such as invalid or missing claim data, which can reduce denials by 50% when done at the front end. Creating metrics to track errors by customers, departments, and employees can also help reduce front-end errors. Onboarding new customers smoothly and providing education on billing procedures can also reduce front-end errors. An intuitive billing manual with all required fields can aid in the onboarding process.
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