Leveraging Cross-Functional Teams to Monitor and Decrease Denials

Healthcare organizations continue to see a rise in denials resulting from continual changes in payer reimbursement policies and uncertainties around claims payment. RCM leaders are leveraging cross functional teams to bring greater focus to denial trends across the ever-changing claims payment landscape.

Types of Denials

There are two different types of basic denial classifications:

Hard denial: Challenging a hard denial requires a formal appeal to the payer and although an appeal is submitted, the denial cannot be reversed. In many cases RCM leaders will make the decision not to appeal hard denials and write off the claim, resulting in lost revenue. Some of the most common hard denials are non-covered services, missing prior authorization, bundling/unbundling codes, and timely filing of claim.

Soft denial: Soft denials can be overturned and paid after contacting the payer and correcting issues and resubmitting the claim for processing. Most common soft denials are missing or incomplete information, coordination of benefits, and duplicate denials where the Medicare claims automatically cross-over to supplemental payer.

Understanding the most common denial reasons for your healthcare organization is the first step to actively managing denials to prevent them from happening for future claims submissions.

Denials Management Teams

Most denials are preventable, prioritization of denial trends and root cause analysis can go a long way for effective denials management. Creation of cross functional teams gives priority to denial management tasks within their respective departments, either through process or policy update.

In creating a denials management team, key team members must include:

● VP of Finance

● Revenue Cycle Director

● Registration Manager

● Managed Care Contracting Manager

● Billing Office Managers

● Coding Operations

● Case Management

Taking the approach to include representation across RCM expanded outreach and bridged the clinical and financial aspect of denials management. Case management representation on the committee to conduct timely appeals and communicating trends to the clinical team enables the team to focus on preventing denials.  

In turn, the RCM leaders leveraged their executive experience and that of their internal teams to put denial resolution workgroups in place to correct denials and resubmit claims with an expected goal turn round time of one week. Establishing RCM guidelines and policies for efficient denials management reduces non-clinical denials and reports successes.

Leveraging claims management software

To further enhance the efforts of our cross functional denials team, increase productivity and staff focus on denials, RCM optimized the claims management system to harness remittance data.  

Dashboards were created to organize data, configure various reports of trending data by denial reason codes and procedure code utilization and identify trends to categorize denials for focused follow-up.  RCM leadership created workgroup rules to prioritize denials and assign work to the correct teams in order to begin denial resolution.

Optimization of systems software helped our teams approach denials from a multifaceted approach. In addition to addressing payer adjudication denials, denial dashboards helped our teams identify emerging denial trends and create new or update registration and claim edits to meet payer guidelines, thus improving our clean claim rate.

Collaborating with payers

Performance audits of remittance advice write-off adjustments, zero payment claims, and partial claim denials, provided rich data for monthly provider payer meetings to improve claims processing requirements resulting in soft denials often turned over on appeal.

“Establishing RCM guidelines and policies for efficient denials management reduce non-clinical denials and reports successes.”

Contract management teams in turn were able to use denials trends to strengthen contractual language around prior authorization, medical documentation, and provider credentialing denials.

Denial reduction progress

Denial management is an ongoing process requiring continuous improvement. Continual monitoring and reporting on the outcomes of process improvements to mitigate denials trends helped our teams act quickly and address areas that weren’t performing as anticipated.  Our denial team set goals and measured our KPI and reported to health system leadership in monthly RCM meeting.

It is unrealistic to think there will never be denied claims, it is a realistic goal to understand what issues are causing the denials and developing an effective denials management strategy to prevent them in future.