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Denials Management: Shall We Dance?



Denials Management can be a sophisticated yet elegant Dance with smiles, well-defined moves, swoops, turns, and dips, or futile movements, uncoordinated, awkward, clumsy, and non-productive due to two-left shoes that are too small.


When denials come in, a well-organized Proactive entity will have a dedicated unit that will Swoop in to identify the issues, search out, find, and log trends (well-defined moves), Turn around, and communicate those findings to partner departments to include I.T. and contracting, and set up systems that will address those issues before a claim goes out of the door. These efforts will result in a noticeable Dip in denials, provide I.T. with information to adjust the parameters in the billing system, and Smile as they hand off crucial data to the contracting team to use during the next contract renewal negotiations.


At least, that is what I teach my clients; these are just some positive results they enjoy.


Now, look at post-COVID IDNs with a Reactive methodology infused with Relief Funds.

One thousand five hundred claims are scrubbed, submitted to the Clearinghouse, cleaned again, then sent to the Payers for adjudication and the hope that each will return with full contractual payment. However, the payers have determined that 35% of those claims will be denied, 25% for Clinical and 10% for Technical reasons. The provider is now at an inflection point. A provider will either have a team ready to deal with the denials or not: are you surprised at the “or not” part of that last answer? I’ll explain.


Depending upon the size of the organization IDN to RHC, the decision on what to do about denials will vary greatly. Some IDNs will take the Two Left Shoe stance and not look to the denials as opportunities or threats due to an erroneous belief that the impact is Too Small and they have the financial resources to put such matters on the back burner. Consider that from 2020 to 2022; there were “bail-outs” and incentives given to these organizations that allowed the option of no action. The bail-out was a trap for some. Many IDNs that chose not to put denials as a priority, an opportunity to isolate and deal with the core reasons for denials, opted instead to take the COVID money and continue to float Awkwardly in place. This Non-Productive and Clumsy meandering ultimately proved Futile, as many filed Chapter 11. A Waystar-sponsored report published by HFMA states that 31% of the surveyed [1] 415 healthcare finance and revenue cycle executives understand the dangers of ignoring denials management, “but that’s not where they’re putting the majority of their resources.”


A cursory look into PACER shows just how dangerous this was. There was a dramatic uptick in Bankruptcy filings just as those COVID funds ran out by those that decided not to take advantage of the temporary relief granted by the COVID funds. Fierce Healthcare and Bloomberg Law have reported on this, with Fierce Healthcare reporting that Chapter 11 filings increased by 84% from 2021 to 2022. And more telling was that the Bloomberg article foretold, “Once the government money ran out, once all the stimulus dollars around healthcare ran out, there was essentially going to be this backwash.” (Dragelin, 2023, p. 1).


Then there are the organizations, such as small physician-owned and Rural Health Clinics, that cannot afford to take any action because of a weaker infrastructure or resources to get to the issue of what is causing all the denials. Any RCM expert worth their salt will tell you that denials ignored will dam up the flow of revenue, causing, sometimes, irreparable damage to the entire revenue stream and that ignoring the problem will not make it go away. RHCs have the highest negative impact on a community due to closure. Many closures are attributed to higher operating costs and a blocked revenue stream. High denials volume is responsible for adding many logs to the dam that chokes the stream. Torchnet.org has stated that despite Texas’ boast of no RHC closures since 2020, it and other states are “in the grips of a rural hospital closure crisis…on average cost 170 jobs and an annual payroll of $22 million.”


Let this sink in.


The dance of Denials Management will not go away anytime soon, but something can be done to improve the odds of overturning a denial, or better still, avoiding them and reducing their rate by 30% to 40%. When this kind of reduction is achieved, solo practitioners, small physician-owned clinics, and RHCs have a fighting chance to Keep The Doors Open to serve those vulnerable patients in areas where larger IDN do not go.


“If only there were a way to make corrections before the claim goes out the door, a way to use a scrubber that incorporates multiple layers of scrubbers utilizing advanced algorithms and constantly updated information to ensure a more thoroughly clean claim.”


There is, and it’s a game changer that any provider, regardless of size or resources, can use. And the creator stands behind it with a guarantee. Any provider searching for real answers that provide tangible results should look here: https://www.arrccllc.com, and go to the “IT’S HERE” post to find out how to turn their awkward stumble into an Elegant Waltz.


Plug aside, I have spent many years in the RCM space and know firsthand what perils await all providers and health systems. I have seen the devastation those with few to meager means to access quality healthcare suffer. I know what an RHC in a medical desert means to the communities that depend on its services, and I will continue to do what I can to bring attention and solutions to providers, especially those in the areas I just mentioned: tools and information that positively impacts the lives of others. For that, I make no apology.

[1] Online survey fielded February 21 March 10, 2023: 5,071 HFMA member invitees • 415 respondents • Job levels include: • Director and above Revenue Cycle • Director and above Patient Access • VP Finance • CFO



References



HFMA (2023, June 22). Denials Management Research Report. Hfma.org. Retrieved July 17, 2023, from https://www.hfma.org/revenue-cycle/denials-management/denials-management-research-report/


Muoio, D. (2023, January 23). Large healthcare bankruptcies rose 84% in 2022, though hospitals mostly dodged the bullet. Fiercehealthcare.com. Retrieved July 17, 2023, from https://www.fiercehealthcare.com/providers/healthcare-bankruptcies-rose-84-2022-though-hospitals-largely-dodged-bullet#:~:text=Major%20healthcare%20bankruptcies%20jumped%20by,new%20research%20from%20Gibbins%20Advisors.


Torchnet (n.d.). Rural Hospital Closures. Torchnet.org. Retrieved July 17, 2023, from https://www.torchnet.org/advocacy--rural-hospital-closure.html


[1] Online survey fielded February 21 March 10, 2023: 5,071 HFMA member invitees • 415 respondents • Job levels include: • Director and above Revenue Cycle • Director and above Patient Access • VP Finance • CFO

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Mission

"Keep The Doors OPEN"

This company was started with one laser-focused goal; providers of medical services, be they Individual Practitioners, a Healthcare System, Clinic, or Medical Center, are entitled to fair and just compensation for services rendered without undue delay or reduction in reimbursement."

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Revenue Cycle Optimization, Denials Management

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A/R Management

 

We specialize in assisting those providers, Health Systems, and Rural Health Clinics suffering from insurance Claims Denials and/or High Days in A/R.

We can and will help you lower your days in A/R and fight vigorously to ensure full payment for services rendered, the accuracy of claims denials, and payment delay.

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