Denial Management

Denial Management - Definition, Goals and Challenges

goals and challenges of denial management

“Together, Let’s Find a Way Towards Lesser Denials & More Payments”

The most chaotic situation created for healthcare providers is when the claims get denied. And the rate at which practices face claim denials is pretty concerning. As per an analysis, the average claim denial rate increased by 23% as compared to four years back. This simply means unpaid services which eventually result in lost or delayed revenues. In the long run, this deeply hurts the financial health of a healthcare provider.

However, it is not just the healthcare insurance providers that are to be blamed. Before targeting insurance companies, make sure you take a step back and double-check the denial management strategy of your healthcare. The most common reason is wrong or misinformation in the claim submitted by a healthcare provider. This forces insurance providers to interrupt the revenue flow of your organization. The thing that creates more haphazardness is that not all organizations focus on aggressively following up their claim denials. This often leads to unfavorable resolutions and results in claims being written off as bad debts.

What is Denial Management

As the name itself says, Denial Management is a strategic approach where the problems leading to medical claim denials are unmasked and resolved. However, that is not the only thing covered under Denial Management. The process also addresses the risk of future denials and ultimately ensures that the practices get paid in time and enjoy a healthy revenue flow.

When a claim is denied, the next step billers should take is to perform a root-cause analysis, take corrective action, and ultimately file an appeal with the payer. This is the correct process to proceed with an appeal for the denied claims. To maintain proper cash flow, healthcare providers must continuously address front-end process problems to avoid any hurdles in the smooth cash flow.

Goals of Denial Management

In the above-section, we have given a sneak-peak into what Denial Management is. Now, it is time to move forward with the goals of Denial Management and dive deeper into why denial management holds utmost importance.


The foremost step to an effective denial management process is by identifying the root cause and reason that caused claim denial. One thing that should be noted is that when the insurer denies a claim, they usually indicate the reason in the accompanying explanation of payment. These indicators are known as claim adjustment reason codes (CARC). The real struggle of healthcare providers is to properly interpret the feedback of the insurer and identify the actual reason behind the claim denial.


After you have successfully identified the real reason behind claim denial, the next step is to manage the denial. Resolving the denial means you are closer to getting paid by the insurer.

The following actions must be implemented while managing claim denials:

  • Properly organizing and speeding up the paperwork for denial-related information
  • Employing sophisticated software to sort the worklists
  • Forming a standard action for each type of denial
  • Creating a checklist of do’s & don'ts


Monitoring a denial management process means keeping everything on track. It is done by ensuring that your denials are compensated properly and timely. Monitoring also extends to the insurer to help the team understand each claim denial precisely. Remarkably, the goal is to determine the time, source, number, and type of denial before solving it.


After the denial management team has all the relevant data regarding claim denials, the next accurate step is to start a prevention campaign for the future. The first step here is to go through all the denials and understand the opportunities to adjust workflows and revise processes.

Challenges in Denial Management

There are multiple challenges that present obstacles in the denial management process.

We will discuss the most prominent ones hereunder:

Lack of Properly Trained Staff

The foremost mistakes which can easily be avoided occur at the registration desk. We can say that almost 30% to 40% of denied claims are a result of registration and pre-service-related challenges. Staff members of healthcare organizations are occupied with the multitude of administrative tasks and don’t have enough time to deal with ever-changing industry regulations of denial management.

Lack of Automation

Manual processes leave the chances for human error and offer less transparency. They are usually very time-consuming and increase the turnaround for claims. There is a proper survey by the Healthcare Information and Management Systems Society (HIMSS) which found out that almost one-third of providers continue to perform their denial management process manually.

Lack of Finances

Another prominent challenge in Denial Management is lack of financial resources and adept technology. When a healthcare provider is not willing to spend on a denial management solution, it is evident that the practice might not be able to collect enough revenue against the services rendered.

Tips to Eliminate these challenges from your healthcare

  • File your claims on time
  • Stay updated with the payer’s requirements
  • Track your claim throughout the entire process
  • Make sure about insurance eligibility & coverage
  • Be specific while diagnosing codes

Apart from these tips, the best ways to manage and prevent your claim denials are by identifying the reasons why they are denied and knowing the rules of claim submission. To handle the denial management process, outsource it to the expert hands of – Unify Healthcare Services.

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