{"id":1600,"date":"2024-10-30T10:00:00","date_gmt":"2024-10-30T10:00:00","guid":{"rendered":"https:\/\/medical-article.com\/?p=1600"},"modified":"2024-10-30T10:00:00","modified_gmt":"2024-10-30T10:00:00","slug":"understanding-healthcare-claim-denials-reasons-solutions","status":"publish","type":"post","link":"https:\/\/medical-article.com\/?p=1600","title":{"rendered":"Understanding healthcare claim denials: reasons & solutions"},"content":{"rendered":"

Experian Health\u2019s State of Claims 2024 report<\/a><\/strong> reveals a worrying trend in healthcare claim denials, with nearly three-quarters of survey respondents reporting a rise. Around four in ten say claims are denied 10% of the time, with one in ten seeing denial rates above 15%. Denials at this scale, driven by various claim denial reasons, represent billions of dollars in lost or delayed reimbursements<\/a><\/strong>, so it\u2019s no wonder that reducing health insurance claim denials tops healthcare providers\u2019 \u201cmust-fix\u201d list. <\/p>\n

However, despite being highly motivated to resolve the challenge, many organizations need more support to overcome operational roadblocks. Prior authorizations are taking longer to come through. Payer policy changes are more frequent. Patient information is increasingly inaccurate. For 65% of respondents, submitting clean claims is more complex than before the pandemic. With some wrangling more than three technological solutions and others lacking confidence about using automation and AI, providers seem to be struggling to find the sweet spot when tackling denials.<\/p>\n

This article looks at the reasons for increased claim denials, as well as how automation and artificial intelligence (AI)<\/a><\/strong> can help healthcare providers overcome these obstacles to increase operational efficiency and improve cash flow.<\/p>\n

Major operational challenges leading to increased claim denials<\/strong><\/strong><\/h2>\n

Clarissa Riggins, Chief Product Officer at Experian Health, says that many providers are increasingly concerned that payers won\u2019t reimburse costs as denial rates increase,when discussing the State of Claims 2024 report<\/a><\/strong>. These concerns reflect operational challenges, including difficulty keeping track of pre-authorization requirements, inability to keep up with rapidly changing payer policies and inadequate front-end data collection.<\/p>\n

While staffing shortages are not among the top three claim denial reasons as they were last year, they are a continuing drag on efficiency for 43% of providers. Burdened by limited resources, these revenue cycle teams are more likely<\/a><\/strong> to make avoidable errors during claim submission\u2014a problem that is affecting the four in ten providers who say they have limited resources to cross-check claims for errors.<\/p>\n

Riggins suggests that healthcare organizations look to technology to close the claims gap:<\/p>\n

\u201cWe had hoped to see a decrease in claim denials from our previous survey, but it\u2019s clear these significant challenges are continuing, adding immense pressure on providers to improve their revenue cycle management processes. This growing crisis is a sign that traditional approaches are no longer enough, and providers should adopt more proactive strategies and the latest technology to navigate this volatility.\u201d<\/p>\n

Top reasons for healthcare claim denials<\/strong><\/strong><\/h2>\n

Here are the top three claim denial reasons and how automation and AI can solve them:<\/p>\n

1. Missing or inaccurate claims data<\/strong><\/h2>\n

Missing or inaccurate claims data is the number one operational challenge responsible for the increase in medical billing claim denials \u2013 among the top three challenges for 46% of respondents in the State of Claims 2024 survey<\/strong><\/a>.<\/p>\n

Submitting clean claims relies on getting data right thefirst time. It calls for speed and efficiency, which is impossible with slow, error-prone manual systems. Yet almost half of the respondents say their organizations are reviewing claims manually. While 54% of respondents believe their technology is sufficient to meet claims management demands, increasing errors and rising denials tell a different story.<\/p>\n

Revenue cycle leaders who embrace automation in their claims submission and denial prevention strategy<\/a><\/strong> set themselves up for smoother operations and a boost to the bottom line. Without the right automation to increase the speed and accuracy of claim submissions, valuable staff time and effort are wasted on manually processing error-prone claims, increasing the likelihood of denial. The lack of automation also places unnecessary strain on staff, diverting their attention from more complex claims issues<\/a><\/strong>.<\/p>\n

2. Prior authorizations<\/strong><\/h2>\n

Claim denials often stem from poor communication between payer and provider systems, with the prior authorization process as a prime example. The process requires providers to seek agreement from the payer to cover a service or item before it is administered to the patient. Failure to do so results in the claim for that treatment being denied. Unfortunately, obtaining prior authorizations is not always straightforward; sometimes, the patient\u2019s treatment must begin before the authorization process is concluded. Other times, the authorization only covers certain aspects of the treatment.<\/p>\n

Not only is the prior authorization process complex, but it is also costly, laborious, and time-consuming to navigate successfully. According to the 2023 AMA Prior Authorization Physician Survey<\/a><\/strong>, physicians and their staff spend 12 hours per week completing prior authorizations, with almost all reporting physician burnout as a result. Providers must stay on top of frequent changes to payer policies, and staff must use multiple payer portals to track authorization requests. Unsurprisingly, authorizations are among the top three claim denial reasons for 36% of respondents in the State of Claims survey<\/a>.<\/strong><\/p>\n

As with any challenge involving digital systems \u201ctalking\u201d to one another, authorizations are a great use case for automation<\/a><\/strong>. Automation can be used to check payer policy changes, alert staff when prior authorization is needed, gather relevant documentation, and review authorization requests for accuracy. This significantly reduces the burden on staff and minimizes the risk of claims being submitted without the necessary authorizations in place.<\/p>\n

Experian Health\u2019s Prior Authorizations<\/a><\/strong> technology automates authorization inquiries and checks requirements in real time. It uses AI to help users find and access the appropriate payer portal to speed up the authorization workflow. Users will have confidence that they\u2019re looking at the same account information and policy details as the payer, which means lengthy negotiations can be avoided. Staff also get accurate status updates on pending and denied submissions so they can take appropriate action and maximize reimbursement.<\/p>\n

3. Inaccurate or incomplete patient data<\/strong><\/h2>\n

Even the slightest mistake or mismatch in a patient\u2019s name, address or insurance details can result in a denial, leading to payment delays and extra work for the staff. These denials are particularly frustrating because they should be avoidable.<\/p>\n

Automation can be used to pre-fill the patient\u2019s information before they arrive to avoid the errors that occur with manual input. This has the added benefit of accelerating registration. These solutions can also check for duplicate charges, missing fields and coding inaccuracies.<\/p>\n

For example, Claim Scrubber<\/a><\/strong> helps providers prepare error-free claims for processing by reviewing each line of the claim before it\u2019s submitted. ClaimSource\u00ae<\/a><\/strong> helps providers manage the entire claims cycle by creating custom work queues and automating claims processing to ensure that claims are clean the first time.<\/p>\n

Implementing technology to prevent claim denials<\/strong><\/strong><\/h2>\n

The report details some of the strategies providers are using to try to reducedenials. These include upgrading existing claims process technology, automating or expanding patient portal claims reviews, and automating tracking of payer policy changes. More than half are motivated to adopt new technology to reduce manual input.<\/p>\n

This is exactly what Denial Workflow Manager<\/a><\/strong> is designed to do. It enables providers to track claim status and appeals and quickly identify those that need to be followed up on. It eliminates the need for manual review, while analysis and reporting give staff insights into the root causes of denials to optimize performance.<\/p>\n

This solution can be integrated with tools like Enhanced Claim Status<\/a><\/strong>, which sends automatic status requests based on the type of claim and specific payer timeframes. It generates accurate adjudication reports within 24-72 hours to accelerate the revenue cycle. The output is viewable in ClaimSource<\/a><\/strong> to streamline workflows and manage the claims process in a single online application.<\/p>\n

Automation and digital technology are also valuable counterweights to the shortage of qualified staff. While staffing shortages aren\u2019t as high on the list of concerns as in previous years, they remain a stubborn problem. By reducing the need for manual input, claims management can be accelerated while freeing staff to focus their attention where it matters most.<\/p>\n

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Experian Health was client-rated #1 by Black Book \u201924 in Denial & Claims Management Outsourcing, Health Systems.<\/p>\n

\nLearn more<\/a>\n<\/div>\n<\/div>\n<\/div>\n

AI solutions for reducing claim denials<\/strong><\/strong><\/h2>\n

Healthcare organizations can get more bang for their buck from automation by integrating these solutions alongside AI. Interestingly, the survey suggests that providers have mixed feelings towards AI: 35% of providers say they want solutions that leverage more AI and machine learning, yet only 8% are actually using them.<\/p>\n

Current ClaimSource users might consider AI Advantage<\/a><\/strong>, which uses AI and automation to generate real-time insights for a proactive approach to denial management. It helps providers combat claim denials from two angles:<\/p>\n

AI Advantage \u2013 Predictive Denials<\/strong> uses AI to identify undocumented payer adjudication rules that result in new denials. It identifies claims with a high likelihood of denial based on an organization\u2019s historical payment data and allows them to intervene before claim submission.<\/p>\n

AI Advantage \u2013 Denial Triage<\/strong> comes into play if a claim has been denied. This component uses advanced algorithms to identify and intelligently segment denials based on potential value so that organizations can focus on resubmissions that most impact their bottom line. Doing so removes the guesswork, alleviates staff burdens, and eliminates time spent on low-value denials.<\/p>\n

This solution complements existing claims management workflows to help providers expedite claims processing, reduce denials, and maximize revenue.<\/p>\n

Another AI-powered solution helps prevent denials on the front end: Patient Access Curator<\/a><\/strong> allows patient access teams to capture multiple data points in seconds. This solution solves the \u201cbad data\u201d problem, using AI and robotic process automation to run checks for eligibility, coordination of benefits, Medicare Beneficiary Identifier, demographics and coverage discovery with a single click.<\/p>\n

The financial impact of denials and the ROI of technology<\/strong><\/strong><\/h2>\n

Another paradoxical finding in the report is that while 47% of respondents see having AI technology as a competitive advantage, less than half say they\u2019d be up for fully replacing their existing claims processing technology, even if presented with compelling ROI projections.<\/p>\n

Automation and AI<\/a><\/strong> can meaningfully impact the claims metrics that keep revenue cycle leaders awake at night \u2013 denial rates and clean claim rates being the top two. Patients also want to see improved performance when it comes to reducing denials. If healthcare organizations cannot offer a reliable, error-free system, they risk losing patients\u2019 trust and loyalty. Providers who demonstrate a well-managed claims system with swift and accurate results will inspire confidence and improve patient engagement.<\/p>\n

It\u2019s essential to assess how existing solutions perform against these metrics and implement upgraded solutions to deliver a more substantial ROI.<\/p>\n

AI and automation in practice<\/strong><\/h2>\n

How are Experian Health\u2019s clients using AI and automation to reduce claim denials? Here are a few examples:<\/p>\n

In only six months of adopting AI Advantage for claims processing and reducing claims denial, Schneck Medical Center<\/a><\/strong> saw denials fall by an average of 4.6% each month. In addition, the time needed to correct claims dropped from 15 to less than five minutes.<\/p>\n

The ambulatory clinic Summit Medical Group Oregon<\/a><\/strong> implemented Experian Health\u2019s claims management solutions, including Enhanced Claim Status and Claim Scrubber, to improve its registration and coding processes. These two solutions helped the team submit cleaner claims, resulting in a decrease in denials. As a result, the company now maintains a 92% primary clean claims rate.<\/p>\n

Another compelling example of the positive impact of technology on healthcare claims management is IU Health\u2019s experience with the all-in-one claim cycle management platform ClaimSource. With ClaimSource, IU Health<\/a><\/strong> managed the transmission of $632 million in claims in five days and processed $1.1 billion of claims backlog.<\/p>\n

Clients who have implemented Experian Health\u2019s Patient Access Curator<\/a><\/strong> have saved over $1 billion in denied claims, significantly boosting their bottom lines.<\/p>\n

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Experian Health ranked #1 in Best In KLAS for our\u00a0ClaimSource\u00ae<\/a>\u00a0<\/strong>claims management system \u2013 for the second consecutive year.\u00a0<\/p>\n

\nLearn more<\/a>\n<\/div>\n<\/div>\n<\/div>\n

Enhancing revenue cycles by addressing claim denial reasons<\/strong><\/strong><\/h2>\n

By pinpointing the most common health insurance claim denial reasons and adopting automation and AI-driven solutions, providers can increase the first-pass clean claim rate<\/a><\/strong>, ramp up the likelihood of reimbursement, and reduce the overhead of reworking and resubmitting claims. Inevitably, hospitals will witness a surge in their financial performance.<\/p>\n

Contact us today to learn how data-driven claims management technology<\/a><\/strong> can help your organization reduce denied claims in healthcare and increase ROI.<\/em><\/p>\n

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The post Understanding healthcare claim denials: reasons & solutions<\/a> appeared first on Healthcare Blog<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"

Experian Health\u2019s State of Claims 2024 report reveals a worrying trend in healthcare claim denials, with nearly three-quarters of survey respondents reporting a rise. Around four in ten say claims are denied 10% of the time, with one in ten seeing denial rates above 15%. Denials at this scale, driven by various claim denial reasons,…<\/p>\n","protected":false},"author":0,"featured_media":1601,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1600","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts\/1600"}],"collection":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1600"}],"version-history":[{"count":0,"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/posts\/1600\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=\/wp\/v2\/media\/1601"}],"wp:attachment":[{"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1600"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1600"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/medical-article.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1600"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}