Understanding Denial Management In Healthcare to Mitigate Risk

When medical practice owners or healthcare providers submit a claim to be paid, they expect to get paid. Unfortunately, in healthcare, this is not always the case. Denial occurs when an insurance company denies payment for a submitted claim or portion of it, often due to errors made by the provider.

Denials can occur because of many reasons, including bad information on the claim form itself such as misspelled words, incorrect procedure codes, no signature/no date required fields completed and so on; incorrect coding of diagnosis and procedure codes; lack of proper documentation; duplicate billing (billing twice for one service); lack of authorization from a patient before submitting a claim; submission within the time frame required by an insurer which has passed.

Each reason listed above results in a different type of denial. One such reason or multiple reasons why a claim is denied is referred to as failure to follow the “rules” set forth by insurance providers.

Denial management in healthcare is the process of identifying, investigating, and validating all errors on a submitted medical bill so that the insurance company can rectify its mistake quickly and pay for services rendered. If an error on the provider’s end did not exist, there would be no denial from an insurance company left unpaid for long periods, if at all, which underwrites that claims must be thoroughly reviewed before submission into any billing system.

The first step in any denial management process is identifying the denial. This is done by contacting the insurance company directly and requesting a copy of your or a patient’s bill with the reason for denial on it. The reply will then be reviewed for any errors or omissions made by you, your staff, or your billing software system being used, such as coding, procedures performed, dates of service, diagnosis, etc.

Once identified and verified, an appeal can be submitted right away to get your money quicker if possible.



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