October 16, 2018
The way payer trends are developing, you can expect your 2019 to be a year defined by denials.
Last year, the Advisory Board’s biennial survey on revenue cycle found a median 350-bed hospital was likely to lose $3.5 million to increased denials writeoffs over the previous four years. As bad as that might sound, it’s just the beginning.
This projection represents a denials trend that hasn’t slowed down — the amount of uncollectable denials hospitals wrote off has increased by 90 percent during a six-year period. At the same time, the appeals process is yielding weaker results. Successful appeals fell from 56 percent to 45 percent on the commercial side over two years, and 51 percent to 41 percent for Medicaid.
That’s a challenging environment to navigate, but for smart hospitals, it also presents a few opportunities for a fresh start in this new age of denials management.
The future of denials involves a lot of complexity.
ICD-10 has already multiplied the number of individual codes to sort through, and on top of that, payer policies aren’t getting easier. You need high-level, detailed insight into this dynamic, and chances are, your existing systems aren’t prepared. This is where technology comes in.
Modern revenue cycle technology is super-powered with advanced business analytics that can help you navigate the onslaught of denial codes coming down the pipeline. But the real beauty of today’s tools is that they help revenue cycle leadership identify pressing denials management challenges, track critical KPIs, and drive optimal outcomes.
Making real change in your denials management requires thinking of the entire revenue cycle process from end-to-end.
How much of an impact do your front-end processes have on your denials outcomes? How are your coders being trained? Are your billers keeping on top of payer policy updates? If you’re having a hard time answering any of these questions, it’s time evaluate whether your workflows are prepared for a more sophisticated denials management environment.
A quick word of warning: Be careful about creating an unnecessary new silo when you’re revamping your workflows. Your revenue cycle technology should be an extension of your approach to internal work processes, so look for solutions that keep that in mind.
It has probably been a while since you’ve assessed your relationships with a specific focus on denials, but as we round out 2018, now is a great time.
We’ve talked tech, workflows, and measurement, and if you’re looking to create change that helps you whittle down your denials, this is the perfect opportunity to bring in consultants who focus on creating real solutions and minimize issues.
Look for relationships with experienced professionals who understand your chosen HIS, are willing to dive into your processes, and most importantly, have a holistic view of the revenue cycle and understand where denials come into play.
If you want to optimize your relationships to address a goal as big as productive denials management, you’re going to need great communication on all fronts.
A lot can go wrong between the time a procedure is ordered, performed, and billed. Keeping an open dialog between your physicians and billers helps smooth authorization issues and reduce documentation errors. An emphasis on communication also helps decrease misalignment between physician orders, services, procedures, treatments, and drugs you’ve already identified as denial-prone.
With all the bad news the Advisory Board survey had, there was a silver lining — Medicare (and Medicare Advantage) have seen an increase in the rate of successful hospital appeals from 50 percent to 64 percent in a two-year period.
This glimmer of hope means you have an opportunity to take a new look at your relationship with government payers. Make sure you’re paying attention to the direction denials trends are taking with these insurers. Don’t forget to evaluate your DSH qualifications (alternate special exception method included) and pay special attention to your adjustment formulas along with the yield you’ve been seeing from them over time. DSH adjustments can get complex, and for rural and urban care providers, it’s always smart to track your reimbursement trends and double check your calculations.
Stopping denials leakage is a process with a lot of moving parts, but with partnerships, technology, and workflows that are aligned with modern revenue cycle processes, you can step into the future of denials management with confidence.
RevSpring Can Help
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We optimize your bill pay capabilities and streamline bill-to-payment reconciliation, making payment fast and easy for your patients and making your cash flow actually flow. If you’d like to learn more about our comprehensive patient engagement and billing solutions, we’d love to help you. Request a demo to see how we can help your organization meet its goals.