Managing Denials Can Result in a Big Payoff in Margin ImprovementManaging Denials Can Result in a Big Payoff in Margin Improvement

Managing Denials Can Result in a Big Payoff in Margin Improvement

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quotation marksThe solution to the pre-authorization issue is to shift from a reactive approach to a proactive solution.quotation marks

One in five claims are delayed or denied, creating 3% loss of net revenue. Not only do these denials erode the provider organization’s bottom line, they require an inordinate amount of administrative work for both payers and providers. But they don’t need to. Technology now exists to stop the denials, improve the process and allow organizations to make more investments in the front end of the revenue cycle. As a result, overall costs are reduced, a lot of unnecessary backend work is eliminated and the payoff can be millions of dollars back to your bottom line. McKesson expert Tammie Phillips, RN, vice president, business consulting, discusses how physician groups and health systems can address denials and optimize reimbursement for greater profitability.

Q. Can you put into perspective how the problems of denial management are impacting payers and providers?

Phillips: The problem of denial management is worsening as the complexity of claims processing intensifies. Health systems are transitioning more patients across multiple settings and specialists, requiring multiple claims. Our population is aging; therefore, care needs and delivery complexity are increasing. Comorbidities and chronic conditions are more prevalent, requiring a population management approach that extends into the community.

Q. What’s the best strategy to manage front-end patient access tasks like financial clearance?

Phillips: The solution to the pre-authorization issue is to shift from a reactive approach to a proactive solution that provides more points of integration and a seamless flow of information from provider to payer and back to provider. Tasks that can be done in advance – such as checking eligibility and determining out-of-pocket expenses before services are performed – help drive quality and sustain the revenue cycle. Plus, by providing clinical guidance and evidence-based support throughout the process, providers can improve efficiency and reserve expert resources to address those complex cases that require exceptions. And by driving automation into the authorization workflow, you can ensure accuracy at each step including meeting time, place and manner-of- care constraints.

Interested in more information on how to accelerate your organization’s progress in managing denials? Read the full Q&A with McKesson experts: Tammie Phillips, David Dyke and Kamron Lachney in the February issue of Healthcare IT News.