Practice Management Alert

Although practice managers and billers agree that following up on claim denials helps ensure a healthy bottom line, working them can be a problem. For many physicians offices, getting claims out the door is the main priority and checking on those that have been denied is something a staff member might do when they have spare time.
 
As a result, practices see a lot of claim denials and rarely know why. The Medical Group Management Association (MGMA) estimated last year the average practice has a denial rate of nearly 14 percent, says Sara M. Larch, FACMPE, MS, chairperson of the MGMA board of directors and chief operating officer of University Physicians Inc., a 1,000-physician multispecialty practice at the University of Maryland in Baltimore. I think there are too many claims that need follow up. she says. If we understand why we are getting denied, we could use that information to fix the problems in our practices.
 
Larch says that denial data can show you what you need to change in your practice. She learned it the hard way. The first hint of problems involving claim denials came about three years ago when her practices cash was declining. The billing staff was complaining about increases in denials and getting upset with the payers. The practice administrators met with one of the larger payers to complain about the denials and discovered the payer had more information about the reasons for denials than the practice did.
 
This was a lesson I would not like anyone else to repeat, Larch says. They told us that they wouldnt keep denying us if we would stop sending them claims in which the patient cant be identified and is ineligible for coverage on the date of service. We had no idea what the problems were. We have issues with payers, but we decided that we wanted to fix our own problems before we battled with them.
Use Data To Pinpoint Problems  
To try to pinpoint the problems that caused the denials and find a place to start focusing corrective efforts, Larchs practice needed data, she says. You dont need a fancy computer system to do this. We took one doctor in one specialty at one practice site and looked at all denials from one payer for one week. We took the explanation of benefits statement that came in and we manually entered each invoice, the amount and the reason for the denial in a spreadsheet and ran the totals. Then, we said based on those results, if we extrapolated that across all payers and all sites and all doctors, how much would that be? It was a huge number. And, we could see from those denials that we [...]