Revenue cycle Management

Benefits, Strategies, and Key Trends of Denial Management in Healthcare

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“Concentrate on key component of revenue cycle management – Denial Management and head in the direction of monetary gains”

Leaving aside the responsibility of delivering patient care, a healthcare practice is a venture trying to acquire deserving RCM. Healthcare providers and practices are constantly on the pedestal to attain adequate revenue.

For this, medical practices take measures and try to maintain revenue cycle management. One component that has a significant impact on the flow of funds is Denial Management.

Denial Management in healthcare is vital to reduce the number of claim denials and to receive complete reimbursement. When the claims get denied, healthcare practices lose track of their financial goals, they struggle with delays in payment resulting in revenue leakage.


The average rate of denials ranges from 2% to 49%. However, most of the denials are avoidable with the help of efficient denial management.

This blog is an ultimate guide to the process of denial management. By the end, you will know the benefits, strategies, and key trends. We will start from the basics and will dive deep into the core to better the medical billing process.

Role of Denial Management in Medical Billing and RCM

Denial of claims is a common issue when it comes to medical billing. Denial happens in case of missing or incorrect documentation after the submission of claims. A structured process known as Denial Management comes into play to prevent such errors that lead to payment delays.

In simple terms, denial management is the process of identification, analysis, and rectification of denied claims. This process has great significance in medical billing as it helps in optimizing the process and enhances operational efficiency.

It is a crucial aspect of revenue cycle management; the success of a healthcare practice depends on this key component. Therefore, tackling the issues related to denials and following efficient denial management becomes essential.

Denial Management Process

As mentioned above, Denial Management is a process that leads to growth-oriented results. The set of steps eases the burden of handling everything at once and directs the focus on the right path.

Let’s go through these steps and understand them better:

Identification of Reasons for Denials

The first and foremost is the identification of what is causing the denials. Denials can be caused by various reasons. It can be errors in coding, missing information, submissions after the due date, failure of pre-authorization, or delivery of services without medical necessity. The purpose of this step is to find out the root cause of denials.

Once you know the reasons, making strategies to prevent denial of claims becomes easy. The first step sets the foundation for a quality process.

Categorization of Denials

After you identify reasons for denials, the next step is categorization of those denials. Not all denials will belong to the same category. Some might be due to errors and others might occur due to late submissions.

This also helps in forecasting future denials and preventive care for the same.

Here is a list of causes, denials are categorized by these causes:

Missing Information and Coding Errors

Coding mistakes and missing information is one of the major reasons for claim denials.

Lack of Pre-Authorization

If you fail to get prior authorization for services that need it, then there is a high chance that the claims will get denied.

Delays in Filing of Claims

Insurance companies set deadlines for the submission of claims, often a failure to submit within time leads to claim denial.

Limited Insurance Coverage

If the services provided are not under insurance coverage or there is a lack of medical necessity, then claims are bound to be denied.

The categorization for types of claims is such as:

Soft Denials

Such denials are temporary as they don’t need any appeal to be rectified. Usually, the provider corrects these claims to reverse denial.

Hard Denials

Such denials are irreversible. In case of a hard denial, the chance of recovery is limited, and usually results in loss.

Preventable Denials

If a hard denial is caused by recoverable reasons like coding errors or eligibility issues, then such denials can be prevented.

Administrative Denials

These are soft denials where the insurance company specifies the reason for denials.

Clinical Denials

These are hard denials caused by the delivery of healthcare services without medical necessity.

This step is useful for deciding the corrective action. Categorization helps in deciding the further action plan to file appeals for the recovery of frozen revenue.

Resubmission of Claims

Resubmission of claims is the third step in the process of denial management. Once the claims are categorized according to their properties, it is time to make rectifications and resubmissions. Most of the denials are reversible, you only must correct the forms and resubmit them. This step has the potential to recover the potentially lost revenue.

A lot of healthcare claims can regain the due reimbursement if the claims are resubmitted. Hence this step is essential for denial management.

Creation of a Tracking Mechanism

After regaining the due revenue, the next step is to create a tracking mechanism for denials. This tracking mechanism is used to track the status of resubmitted claims. The mechanism tracks the entire claim processing so that no claims are missed. Such a mechanism ensures timely processing. Also, it ensures that the claims are not missed or lost.

Developing Prevention Techniques

The fifth step is the prevention of future denials. This is done by developing techniques to forecast the reasons for denials and taking measures to avert them. The technique involves maintaining a list of various reasons for denials and keeping a check on all those factors. Taking care of even trivial aspects will lead to perfection in filing and the prevention of errors.

Supervision of Future Claims 

The final step is to implement a practice of supervising claims before filing. This step involves taking extra care with the documentation before filing and ensuring that all the data is accurate. This supervision helps in identifying issues beforehand so that the task of resubmission is reduced.

Top Strategies and Practices for Denial Management

The steps of denial management give a clear picture of a proactive action plan. However, there are numerous challenges to maintaining effective denial management. Navigating through the difficulties is burdensome, but with some strategies, you can optimize your denial management and get positive results.

The strategies and practices are:

Perform Frequent Audits

Performing frequent audits enhances the effectiveness and reliability of denial management. Audits are an excellent way to examine and evaluate gaps in the process so that taking corrective action becomes effortless.

Prioritize Statistics and Trends

Staying current with statistics and trends reduces the challenges of denial management. Knowing the ongoing rates regarding denials, appeals, and the ratio of recovery. Tracking the trends helps in the categorization of denials. This makes assessment easy and enables proper flow of operations. Using analytics tools further reduces the hassle of mitigating errors.

Stay Prompt with Filing

When it comes to claim filing, time is vitally important. Filing within the deadlines set by insurance companies is beneficial to avoid loss of revenue. Staying prompt is easier with a systematic process that ensures the timely submission of claims.

Outsource Medical Billing Services

Managing the whole process of medical billing is a huge task. This responsibility comes with tedious complexities leading to inefficiency in providing the best patient care. There is a pressing need for a medical billing specialist to take charge of denial management.

Partnering with medical billing services can generate fruitful results for your healthcare practice. This is because professional services are aware of handling the process with precision. Their experience ensures the accuracy of claims and maximization of reimbursement.

The denial of claims is on the rise and there is a pressing need to change this situation. Outsourcing partners have expertise to deal with denials and improve the condition.

There is a reason that denial management is a crucial aspect of medical billing and revenue cycle management. Constructive denial management benefits your healthcare practice. Let's see how:

Major Advantages of Managing Denials in a Healthcare Organization

Good denial management means better revenue cycle management. Efficiently managing denials benefits the organization and leads to boosting the bottom line.

Increase in Clean Claims Rate

Denial management leads to clean claim rates. Clean claims are defined as claims without any errors. Such claims eliminate the chance of denials. When a clean claim is submitted, they are approved due to its accuracy and the healthcare provider receives complete revenue.

Along with that, clean claims prevent the extra cost that healthcare providers incur in case of denials. Therefore, they are cost-effective, and they also reduce the overall time spent on rectification and resubmission of denied claims.

Improvement in Net Revenue Collection

As the claims are managed well, it leads to a subsequent increase in financial performance.

Denial management helps in analyzing drawbacks in the process of submission and offers corrective measures. This elevates performance, improves net revenue collection, and leads the practice to profitability.

Better Patient Experience

The advantages are not limited to just administrative benefits. It has an overall impact where patients are also satisfied. This happens because healthcare providers have more time to improve the quality of patient care they offer. Denial management is such a process that improves and enhances performance in every aspect of the practice.


The best way to improve your denial management is to choose an outsourcing partner to avail of the medical billing services.

Unify Healthcare Services is the leading medical billing company in the USA with specialized solutions to every medical billing challenge. Our comprehensive approach to denial management efficiently identifies, rectifies, and resubmits the claims. Our medical billing and coders work to eliminate errors and prevent future errors. We customize our services for the unique needs of every client.

Medical billing services at Unify will lead your healthcare practice to your desired revenue goals without the hassle of managing administrative tasks.

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