The Truth about Denials

I’m astounded by the reactions of various groups who support the killing of Brian Thompson, blaming him and others like him for flaws in the healthcare system. Making a murderer a hero is just as nutty as the killing itself. Blaming those who must make tough calls every day furthers the nuttiness. The facts tell a different story. Here is an excerpt from our soon-to-be released book, Healthy Decisions: Critical Thinking Skills for Healthcare Executives.

Skyrocketing denial rates compromise the financial health of hospitals and lead to patient dissatisfaction. Automation at the front end of the revenue cycle helps prevent denials, but insurers still deny between 10% and 20% of all claims at the initial stage, indicating managing denials needs to march in lockstep precisions with preventing them in the first place.

According to the Kaiser Family Foundations’ study on healthcare claim denials, 17 % of in-network claims were denied in 2021. United Health Care denies about 1/3 of the claims they receive; and Humana, Cigna, and UnitedHealthcare have faced class actions for allegedly deploying advanced technology to deny claims. Insurance companies and other payers can’t make money and keep insurance rates reasonable if they pay every claim they see. Therefore, individuals and hospitals need to work together to develop meticulous systems that don’t give the payers reason to deny claims. Here are ten ways to do that:

1. Keep patient information updated and available.
2. Verify eligibility and benefits prior to admission.
3. Know insurance filing limits.
4. Code to highest specificity.
5. Run medical necessity check.
6. Stay up to date with payor bulletins and changes.
7. Educate and train staff.
8. Review and clean up claims before submitting them.
9. Create a denial management review process and assign responsibilities.
10. Track and report denials.