Claim Denial Recovery Solutions

September 11, 2019

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We earlier reported on how hospitals continue to bleed revenue loss due to $262 billion in initially denied claims each year. Notice the word “initially.” That’s where smart denial management and claim denial recovery solutions come in.

18% of claims denied: The Kaiser Family Foundation (KFF) has conducted in-depth research on denials and reported earlier this year that, “Of the 180 major medical issuers in states included in the transparency data, 130 show complete data on in-network claims received and denied for the 2017 plan year. Together these issuers reported 232.9 million in-network claims received, of which 41.9 million were denied, for an average in-network claims denial rate of 18%.”

Looking ahead, the KFF notes that “Reporting on the reasons for claims denials and other details about the nature of claims submitted and denied could inform the transparency data. CMS will require issuers to report six denial reason categories beginning with the 2019 data collection. The CMS notice specifies these categories: (1) referral or prior authorization required, (2) out-of-network, (3) services excluded or not covered, (4) not medically necessary, excluding behavioral health, (5) not medically necessary, behavioral health, and (6) all other.”

If you are interested in the “other” category of denials and more details, CMS has prepared an overview list with links to further information here.

One in seven claims denied: A related article from the McKennon Law Group points out that, “the U.S. Department of Labor estimates that about one claim in seven made under the employer health plans that it oversees is initially denied – about 200 million claims per year.” According to that article, insurers deny claims in a variety of ways, including:

  • Denying broad categories or types of claims rigidly without evaluating whether the specific claim is covered under their plan or policy.
  • Claiming a medical procedure is experimental, even when doctors disagree.
  • Using auditing software often dubbed “denial engines” because they aim to lower the amount of money paid to physicians and hospitals. These auditing programs find technical errors in billing codes that all doctors, hospitals and clinics, among others, submit for payment.

What are smart claim denial recovery solutions? Well, in a nutshell, you need a team of experienced specialists with smart software in the mix. It’s a cross disciplinary solution. That’s why R1 was pleased to announce recently that it acquired Washington & West LLC, enhancing our team with the right focus areas for denial management. New multidisciplinary team members include:

  • Clinicians (physicians, physician assistants, registered nurses)
  • Certified professional coders
  • Attorneys
  • Reimbursement analysts
  • Recovery specialists

This team also brings proprietary software solutions. In addition to software R1 has already deployed, your claims may now be tracked and managed by Quantum Appeals©, proprietary software developed by Washington and West that provides focused standard, ad-hoc and customizable reporting for trending and denial prevention. This system also enables automated updates into your own records system for convenient notification and reviews.

R1 formed with the goal of creating a unique, first-of-its-kind, end-to-end enterprise provider of revenue integrity solutions for hospitals. Denials management is an acute and growing pain point for our provider clients, and we believe this new addition of seasoned professionals from Washington and West will enable us to deliver even greater results and a more comprehensive ‘safety net’ for our client partners.

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