Medical Billing

Effective Denial Management – A Boon for Your Healthcare Practice

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“Deal with the turmoil of claim denials with effective ways of Denial Management that prevent revenue leakage and promote financial growth”

Every Healthcare provider and practice aims to attain financial stability where revenue collection is prompt and adequate. However, this comes with the responsibility of managing the steps in the medical billing process with efficiency. One factor that has an immense impact on financial performance is payment denials. When a claim is denied, it can cause significant loss, and recovery from this can be another challenge.

Even though claim denials are a concerning situation for a healthcare practice, there is an effective way to deal with it. A common practice to drive positive results is Denial management. It is a reliable method to eliminate the hurdles to get a smooth cash flow.

In this blog, we will understand the concept of claim denials and how denial management can bring productive changes in the final revenue outcome.

Let’s Start with the Very Basics and Get to Know About Claim Denials

Claim Denials occur when an insurance company (carrier) refuses the request for reimbursement to the healthcare provider (policyholder) against the services provided to the patients. Now, there are several reasons for the denial of claims and mostly they are from a healthcare provider’s end. These reasons can be anything ranging from errors in filing and insufficient coverage, to a failure in conducting pre-authorization.

When the claims get denied, healthcare providers lose their revenue, and this can elevate stress related to the hassle of medical billing. Not all denied claims can be rectified, but still there are chances to regain the lost revenue by resubmitting claims. This process of effectively reviving the financial state with strategies to prevent errors is called denial management.

Get More Clarity on Claim Denials with examples:

Suppose a patient is admitted to the hospital for jaundice and stays in the care for some days. The healthcare provider submits the claim to the insurance company for the compensation of hospital stay and services. The insurance company denies the claims because the patient (policyholder) did not preauthorize the visit.

In another case scenario, the insurance company can deny the claims on the reason that the healthcare provider is not in the approved network of the company.

Both situations can be overwhelming for the healthcare provider or the practice as they can create profound effects on the financial flow.

Here Are the Reasons That Cause Denial of Claims

  • Mistakes or missing information details while filing claims
  • Nonfulfillment of eligibility criteria due to the lack of insurance coverage
  • Insufficient documentation to support the claim
  • Not taking prior authorization from the insurance company
  • Billing errors like over or under coding
  • Avoiding guidelines and contract details of the insurance company
  • Not taking steps to rectify and resubmit the denied claims
  • Giving wrong or false information to the insurance company
  • Not considering the pre-existing conditions of the policy

As we have discussed the denial of claims, we will dive into denial management and efficient ways that can improve the claim management of healthcare provider and practices.

Denial Management

In medical billing, the process of denial management holds huge significance. It is a crucial aspect of optimizing the operational flow and improving the bottom line of healthcare practice. All in all, it is a vital part of maintaining and enhancing the revenue cycle management.

In simple terms, denial management refers to identifying, analyzing and resolving insurance claims that are denied. In other words, it is a planned method to uncover issues that lead to denials and take corrective action to settle them. However, the scope is further extended to prevent future denials and ensure timely returns.

Did You Know

Most of the denials can be recovered but 65% of the claims are never resubmitted to get the lost revenue.

Denial management involves various steps to achieve the goal of lowering denials by tackling the obstacles effortlessly. By dedicatedly following all the procedures, a healthcare provider can streamline the workflow and get the desired results.

With some effective ways, you can optimize your denial management process and reduce the amount of time and energy spent on rectifying errors.

There are some proven ways of denial management that enhance the efficiency of the healthcare practice in getting the well-deserved revenue.

The ways to systematic and successful Denial Management are:

Accurate Completion of Medical Claims Forms

One of the main reasons for claim denials is the inaccuracy of information while filing. A simple remedy to this problem is paying extra attention during claim filing to avoid errors.

Getting approvals from this step seems easy but there are numerous factors to entering the correct information in claim forms. The process of maintaining accuracy starts with investigating the insurance policy to find out its scope of coverage. As a healthcare provider or a practice, you must collect all the relevant patient data like their name, address, and updated policy number. Apart from that, don’t miss out on information like services availed, date of the visit, type of treatment, provider number, and NPI number. After this, you must check the accuracy of CPT and ICD codes for procedures and diagnoses of different specialties.

With all this information, we are only halfway through. Another vital part of complete documentation is supporting documents that include lab results, diagnostic reports, and referrals. Don’t forget to mention the date and sign before submitting the form. The last step is to carry out a strategic follow-up procedure. This is to ensure that the insurance company has successfully received the claim and processed it further.

Track Down Prior Authorization to Avoid Mistakes

There are many medical branches that require prior authorization to receive payments for the healthcare services provided. As a result, focusing on prior authorization is significant to prevent denial of claims. This important process is a way to control the cost and make it more effective from a patient’s point of view. It is the healthcare provider who seeks prior authorization to ensure compensation for the medical treatment and procedure. Here, the insurance company is responsible for covering half of the cost incurred.

Prior authorization determines two things: whether the specific treatment or procedure is medically necessary and whether it is covered under the insurance policy of the patient or not. A failure to fulfill these two requirements, the insurance company will deny the claim and the burden to compensate will come to the patient.

Here are some ways to avoid denials of claims due to prior authorization and make medical billing trouble free:

  • Use automated processes to reduce errors and mistakes and ensure the accuracy of recorded information. This way you can easily maintain the workflow, eliminate wait times and improve accuracy.
  • Set a clear framework for prior authorization that consistently evaluates all requests. The pre-decided factors to approve or deny requests will eradicate the hassle to a greater extent.
  • Regularly monitor and evaluate the process of prior authorization to identify the areas of improvement and take corrective actions in case of drawbacks or shortfalls. This can be done by collecting feedback from healthcare providers and patients.
  • Prioritize the need to train everyone who is involved in the process to enhance the efficiency in completing the tasks accurately.

Seek Precision in Medical Billing and Focus on Consistency

Billing is the most essential tool to get reimbursement and manage the revenue cycle of the healthcare practice. To achieve this, you need to ensure a reduction in claim denials. As discussed earlier, there are numerous reasons that lead to denial of claims. However, this is preventable with the help of a quality check process that identifies and corrects the problems related to claim denials. Not only this, but it also reduces the risk of further denials.

This billing quality check is a process that reviews treatments, procedures, patient information, and related codes. The idea is to ensure all the information is accurate and meets the policy guidelines.

This process can help healthcare providers reduce the risk of claim denials, eliminate errors, and increase accuracy in claim filing. It also reduces the need to resubmit the claims, and this minimizes the overall time spent on receiving payments.

With the following measures, you can meticulously follow a billing quality check:

  • Document all patient-related information accurately and on time
  • Be consistent in recording every billing information and clearly define the criteria for accuracy
  • Automate the process to reduce errors and improve the overall process
  • Regular training for billers to avoid complications

Stay Updated with the Payer Guidelines

Insurance companies set some policies and procedures that determine whether the medical services are covered in the patient’s insurance plan. These policies and procedures are known as payer guidelines. These guidelines prove to be a good tool that helps in accurate claim filing.

The chances of reducing the claim denials are highly dependent on the payer guidelines. For example, a claim could get denied if the service provided is not medically necessary under guidelines. By following the payer guidelines, healthcare providers can easily eradicate the need for appeals and resubmissions.

It results in timely revenue and also adds to the overall process of revenue cycle management.


These tips are some of the best ways to manage and prevent your claim denials. However, identifying, analyzing, and resolving insurance claims is a tedious task. As a healthcare provider, you can avoid this hassle by handling your claim processing to an outsourcing partner.

Unify Healthcare Services - efficiently handles the denial management process with the help of industry expert professionals.

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