Streamline the denials process to increase revenue

August 24, 2020

Too many practices don’t follow up on denied claims. Here’s how to change that.

Claims denials can be frustrating for a physician practice to deal with, but leaving them unattended leaves a significant amount of revenue uncollected, says Andria Jacobs, RN, CPHQ, chief operating officer at PCG Software. Her company develops healthcare applications focused on cost containment, fraud and abuse detection, based in Las Vegas, Nev.

Jacobs says that between five and fifteen percent of physicians’ claims are typically denied by payers—though other sources suggest it can be even higher. While this may be partially due to the fact that payers have better edits and screenings, as well as full time auditors looking at the claims, she encourages physicians’ to streamline their accounts receivable process to get denials paid.

“When I did valuations I’d find a lot of practices did not follow up on claims that were denied or pending,” Jacobs says.

Physicians cannot expect to handle their billing alone, however. “It takes a dedicated person to take ownership of the process, someone who can look for the opportunities to get more revenue coming in by following up and making sure these claims are handled directly.”

First, billing staff must bill correctly, she says. “Many offices are dependent upon coding that comes out of their EHR.” The problem, she says, is that not every EHR is updating necessary billing codes every year.

“We’ve seen where the codes that were deleted in July never got fixed and for months the practice is billing deleted codes that will never be paid.”


She recommends practices also audit their tools and billing instruments to be sure they are updated regularly.

Then, practices need to be tracking which claims are denied and why. “You can do that by looking at remittances or whatever messaging the health plan is using to let you know there’s a problem with a claim.”

Once it’s clear why a claim is denied, billing staff must make changes immediately and then resubmit the clean claim.

After that it’s important to track the payment time of that resubmitted claim, which can often range between fifteen and thirty days from submission (and sometimes longer).

She says practices should be aggressive in getting plans to pay on time. “The health plans must pay on time or they have to pay interest penalties, and I would hold their feet to the fire on those penalties because it’s important you get every bit of revenue that you deserve.”

If payments are not being made on time after a clean claim was resubmitted, she says, “Then somebody needs to step in and send tracers and see where the claims are and what the status is,” Jacobs says.

If this becomes a consistent problem, it may be time for the physician to re-evaluate their relationship with that payer.

While handling denials may seem like a lot of extra work, Jacobs says it’s financially worth it. “Fifty to sixty percent of denied claims never get reworked.” That can be a lot of money left outstanding.

While it might seem trickier to get outstanding payments from patients, Jacobs says billers need to reach out to patients and find out how to do what is most convenient for the patient to pay. In her time she’s done everything from sending bills in colored envelopes to making electronic payment options available. “I’d rather get ten dollars a month for the next ten months than write off $100,” she says.

All of these steps to improve the denials recovery process should not be haphazard, however, she says. “It needs to be a systematic process so that you know what is and isn’t working.”

Moreover, it’s crucial to train billing staff and offer them the resources to be able to follow through on denials, whether that’s sending them to coding conferences, training sessions, or making sure they have access to web based resources.

“The whole goal is to protect the patient from being billed incorrectly and [make sure] physicians have revenue coming in.”