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Tuesday September 12, 2023

Master Denial Management: 4 Essential Techniques for Healthcare Providers

When talking about denials, it’s important to understand that it’s a broad subject.

There are variations in denial rules across different healthcare facilities, and factors like contracts, payor mix, case mix, local coverage determinations, and staffing influence the types of denials affecting each facility. Instead of getting lost in the weeds, we’ll take a broader approach by examining best practices that can apply to most settings.

Our examination focuses on practical and beneficial methodologies most facilities can adopt right now. Specifically, improving appeals processing performance. Since studies indicate that 24 percent of denials can’t be recovered, implementing an effective appeals process for the other 76 percent is critical.

Here's how:

Establish Clear Business Rules

Defining a clear set of business rules is a key first step in creating a process to resolve denials. Here’s some questions to ask to determine if you’re on the right track:

  • Which claim adjustment reason codes should we consistently pursue or avoid?
  • Are these rules specific to certain payor types or individual payors?
  • Is there a minimum dollar amount associated with a particular denial/payor/patient status that warrants pursuit?

Ironing out gray areas and establishing well-defined rules that categorize appeals appropriately will help your team manage them more effectively.

Conduct Cost Analyses

Every week that an account sits in receivables, unresolved, your bottom line takes a hit. While aging denials may be necessary to settle some remit activity, once this aging process is complete and you decide to pursue an appeal, filing it within one week, at maximum, should be the goal. In addition, knowing when to discontinue a costly appeal can prevent downstream financial strain.

Do a cost analysis. Gather the data you need to understand the costs associated with certain appeals, enabling informed decisions regarding the types that are worth pursuing.

Monitor Performance and Train Staff

Even small back offices should undergo routine performance monitoring. While implementing oversight often carries negative connotations, knowing where your strengths lie can benefit even a lean team. For instance, an evaluation might identify which appeals coordinator is most effective with certain appeals, helping you determine where workloads can be shifted to increase efficiency.

Benchmarking and Analysis

In addition to regularly assessing staff performance, analyzing denials and appeals data should drive ongoing maintenance of business rules.

Evaluating success rates and associated administrative burdens will illuminate opportunities for rule adjustments or modifications to optimize your business model. Regularly benchmark against competitors to establish a baseline and determine the effectiveness of your model.

Ready to revamp your business services?

MEDHOST can assist you with the enterprise-wide revenue cycle management, including denials.  Get in touch with us at or call 1.800.383.6278 to learn more.

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