Executive Summary
Shifting the focus to denial prevention from denial management is the mantra for the success of the hospital revenue cycle. Statistics say that it takes approximately $25 to work each denied claim. Trend analytics to identify top claim denials and focus on eliminating the root cause seems like a logical solution to the problem. Still, it takes a lot of discipline to do this iteratively.
Even long-standing accounts receivable and denial management programs go through slippages from time to time. At Access Healthcare, we think of the revenue cycle as a team sport. While revenue cycle analytics can help you identify the top denial issues, preventing denials requires a focused effort that involves educating and working with clinicians and front-end services staff to fix the problems for the long term.
Our client, one of the nation’s top medical billing companies, provides revenue cycle solutions to hospitals and physician groups across the country. As one of their hospital clients faced increased days in AR, high denial rates, and increased A/R in the 120+ day aging bucket, Access Healthcare implemented an iterative program to improve metrics quickly and shift focus to denial prevention.
Client Background
Our client, one of the nation’s top medical billing companies located in New Jersey, provides revenue cycle solutions to hospitals and physician groups across the country. Access Healthcare has been providing offshore revenue cycle solutions support to the client since 2010.
Challenges
Our client supports one of the largest hospitals based out of the New Jersey area, experiencing a surge in Days in AR, high denial rates, and increased receivables in 120+ day aging buckets. Further, the client had implemented an inventory management software that created multiple issues in allocating claims, which further escalated the accounts receivable metrics.
Days in A/R stood at 48 days
The total outstanding 120+ day A/R was at 28%
Solutions
Access Healthcare took a four-pronged strategy to provide a sustainable solution to the client.
Fixing the technical glitches. We deployed a team to provide inputs to the client to resolve the technical glitches and build a robust system.
Denial Analytics and Focus on Denial Prevention. We created a task force of some of our most experienced subject matter experts (SMEs) and denial management experts to fix denials. The team analyzed the denial trends and focused on resolving the top issues causing denials. They focused on finding long-term solutions by working with clinicians and front-end staff.
Addressing new denials. Besides finding strategic solutions, we created a team to handle recent rejections and work on paper correspondence to ensure that the denials were addressed within 48 hours. Besides increasing cash flow by quickly resolving the claims, new denials were not adding to the pre-existing issues.
Strategic A/R management. The team worked on A/R strategically to reduce the days in AR and 120+ day aged claims.
Results
The four-pronged strategy not only improved the A/R metrics in terms of 120+ day insurance A/R and the overall Days in A/R, but it also created a sustainable, long-term framework to shift focus to preventing denials.
120+ insurance A/R improved from 28% to 19% within ten (10) months of making the change
We started working on all denials within 48 hours, which resulted in a quick resolution
Days in Accounts Receivable (DAR) improved from 48 days to 41 days after implementing the changes
Most front-end issues causing denials were eliminated