Denial Management: Improvement Through Data Analysis

Health insurance claim denials cause many healthcare organizations to lose a significant amount of money each year. In fact, large health organizations frequently lose millions of dollars per year due to ineffective denial strategies.

One way that is proven to help improve denial rates is in-depth data analysis and reporting. By putting into place reporting measures to track the denial rates of your organization and then discovering why and where there are inefficiencies, is the first step in denial management.

Data Collection

Dynamic data gathering and analysis is key to pinpointing denial causation by denial type and payer. Set up a way to determine denial causation within your organization. Create an analysis of the twelve months of submitted claims. This will establish a baseline for determining the total amount of revenue lost due to denials.

Without a good reporting process and reporting software that collects valid and meaningful data, you will lose crucial data that can help improve your denial rate. Important data should include, but is not limited to: payroll, staffing, labor, payer mix, contracting, revenue cycle, accounts receivable, billing/expenses, supply costs, sales prospecting and closing, denials, utilization review, staffing, and costs of core services.

Data Analysis

Once you have a strong reporting process and data collection technique in place, assess outliers and discover where you highest denial rates are. By isolating this data you can now make recommendations and implementations for change.

Is there a solution to the problem? Is it a preventable problem? Who within your organization will be responsible for this implementation and on-going analysis of its efficacy?

Having access to valid and relevant data about your organization will not only help improve and reduce denial rates but it can also help you identify problems in your procedures or ways of reporting. This in turn helps to prevent and improve systems and processes within your organization, saving you money.

Case Study

BHM helped a Hospital System dramatically decrease denials and improve profits through in-depth data analysis.

• $800,000 in revenue was able to be recouped in 3 months due to performing an in-depth denials analysis.
• The in-depth approach included reasons for the denied claim, denial appeal status, provider and payer responses to authorizations, provider and payer responses to concurrent insurance claim denials, information regarding physicians and departments involved in insurance claim denials, case management notes, and level of care determination and revenue which was lost or at risk.

Pin-pointing the best data for improvements depends on your organization’s goals. Measuring the highest quality data can impact your returns much faster than the quantity of data. Ask yourself if your current review process gives you what you need, then contact BHM. Let us show you how to choose key measures that are in line with your organization’s goals.