What Is Denial Management In Healthcare?
Revenue cycle management has been a top priority for hospitals in recent years. This has resulted in a significant increase in the use of denial services. Denial management refers to the practice of denying healthcare claims. Denial management can be a very effective tool in the revenue cycle. Denial management is part of the second and third stages of care. It is also a way for hospitals to increase profitability without impacting quality, patient satisfaction, or medical ethics. Good hospital denial management will increase medical malpractice claims and should be planned for early in the revenue cycle. Below are some of the reasons why hospitals must use healthcare denial services.
1. Decrease in Payer Reimbursement
Payer reimbursement has been declining, pushing hospitals to be more profitable. Studies have shown that when hospitals don’t manage their denials appropriately, they can miss out on millions of dollars in revenue. Payers are becoming stricter and stricter with their claims, and eventually, they will stop reimbursing any other medical facilities except for their in-network physicians and hospitals. Claim denial management is key to keeping revenue and profitability up. You must adequately handle all claims denials that come in, or your revenue will decrease significantly. Working to optimize hospital denial management is an important step in combatting this issue. If you’re not making money, there will be no reason for you to stay in business.
2. Decrease in Quality of Service
Denial management should increase patient satisfaction and decrease hospital-related medical malpractice claims. The overall quality of patient care should remain high and be on par with other facilities. To improve patient satisfaction, you must be able to handle the denial claims that come in. If your hospital is experiencing high numbers of medical malpractice claims and denying claims, this suggests you need to do a better job with your patient care. While it is vital to maintain a high quality of care, it is also essential to properly manage the insurance-denied claims that come in. Not adequately working denial reduces patient satisfaction as well.
3. Identify Underlying Reasons for Claims Denial
When hospitals watch for trends and patterns in denials, they can identify the underlying reasons for claims denial. They can address these reasons and try to have claim denials removed from the system. This means that individual patients will not have problems with medical bill payments, and hospital profitability will increase. Hospitals that handle claims independently must determine whether a patient is eligible for compensation through their in-house personnel. This type of hospital has to ensure that everyone who works at the facility understands how to properly manage claims based on patient status and eligibility for payment.
4. Decrease Negotiations Costs
Hospitals save a lot of money by having denials managed by third parties compared with any other measures of denial management. Hospitals that don’t have Denial Management in place can spend a lot of money on surveys and audits. With the cost of these, the amount that it should cost to cover those claims is much more than what it’s going to cost because the hospital already paid for all their claim intake expenses and managed claims before denial. By denying claims, hospitals are saving all of this money, which can be put towards improving patient care or reducing expenses for healthcare items and services.
5. Quickly Process Denied Claims
Since there is a follow-up on the developments and results at every stage of the denial process, the process is quick, efficient, and results-oriented. If a patient is determined to be eligible for payment, the hospital is required to submit the information to the third-party vendor. If a patient has been determined not eligible for compensation, all claims are processed quickly and efficiently. With Denial Management and Claims Management Partnerships on board, a hospital can manage claims in real time by having them denied or paid as they come in. The faster the claim is paid, the better it is for patients, hospitals, and healthcare providers. With Denial Management, a hospital must make sure that the claim denial process is handled quickly and efficiently.
Conclusion
Denial management is a process that should be in place to ensure high patient satisfaction, high hospital profitability, and low medical malpractice claims. Hospitals use denial management services to reduce the amount of money spent on Medicare audits, surveys, and investigations. Preparing for denial management early in the revenue cycle will make it easier for hospitals to stay financially stable. Denial management should focus on helping patients and ensuring their care is impacted as little as possible due to denials from their insurance company.
