Patient Financial Services: Reducing Denials

Throughout the research and development of the Patient Financial Services meeting being hosted live online this October 11 & 13, we have had the opportunity to speak with executives across the country with decades of experience in patient finance, access, and revenue cycle about the challenges faced in balancing access to care with payment for the care provided. In nearly every conversation, there was a focus on reducing denials; whether we were speaking to a small hospital or a regional health system, urban or rural, academic or for-profit, front, mid, or back-end, the focus most frequently returned to strategies for reducing payer denials.

For additional clarity into this issue, The Change Healthcare 2020 Denials Index provides tremendous insight into more than 100 million hospital transactions across 1,500 U.S. hospitals, revealing an average denials rate increase of 23% since 2016, representing just over 11% of claims being denied on initial submission. The report goes on to reveal that half of denials are linked to front-end revenue cycle issues, with a leading cause of registration and eligibility, representing more than 25% of denials. Beyond the 50% of front-end challenges causing denials, the mid-and-back end revenue cycle denials represented a roughly even split.

It starts at the front.

Front-end patient finance and ensuring accurate registration and eligibility verification is potentially the most critical first step in denials prevention, and executives are working very hard to reduce errors and to work with patients to ensure data is accurate at every step. While registration and digital front-door technology have assisted in increasing automation and work-flow, patients do not realize the importance of data accuracy, often creating small errors which result in larger issues down the line. Continued workforce shortages and turn-over in registration staff have also increased the difficulty of capturing information in a highly accurate and precise way as workloads have increased while at the same time levels of experience and knowledge have decreased as new staff are brought on and brought up-to-speed.

Beyond registration and eligibility, ensuring prior authorization for care is an additional area of concern for healthcare executives, with the Change Healthcare 2020 Denials Index indicating that more than 10% of denials stem from lack of pre-authorization or pre-certification. Collaboration between prior authorization staff and providers to ensure complete and highly comprehensive documentation to support authorization has become more important than ever in securing prior authorization. Yet despite the best efforts of healthcare executives, challenges are also on the rise in working with payers, where errors occur from a host of areas including a lack of procedural knowledge, particularly when addressing new surgical techniques and therapies that have recently gained coverage.

It doesn’t end at the back.

While much focus on denials is placed on front-end prevention, a leading cause of denials on the mid-and-back-end, at approximately 17%, stems from missing or invalid claim data, underscoring the need for focus on the accuracy of claims being submitted. Individuals that we spoke to over the course of our research also noted the importance of not only the accuracy of the claims but the need for rapid submission of the claims to meet deadlines for coverage; an issue of considerable challenge when working with providers on completeness of documentation.

Coding and Clinical Documentation Integrity are also a core focus for executives when considering the prevention of denials, with accuracy and provider collaboration again a core focus for healthcare executives. Training of documentation teams and the integration of executives with healthcare backgrounds including MDs and RNs is a considerable focus as hospitals work towards increasing the accuracy of claims through coding integrity.

The view from the top.

Whether the focus is on the front-or-back-end of the revenue cycle, executive leadership is providing the foundational guidance for teams with a focus on preventing leakage through reducing denials and ensuring prompt payment from payers. Those finding success in this difficult task are often approaching the issue from a more holistic viewpoint, connecting front and back end teams in a more collaborative style to not only identify root causes of denials but to also quantify the revenue lost as a result of denials in order to better allocate staff and resources to prevention. Regardless of the size of the organization, all executives we spoke to were in agreement that better collaboration between teams resulted in a reduced level of denials for their organizations.

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