Delivering clean claims is a goal of every revenue management team. Simply put, a clean claim is a claim without errors or missing/incomplete data. A more stringent definition is a claim that is fully paid on first submission. A typical health system is at risk for over 3% of their net patient revenue – an average of almost $5M annually for claim denials.1 Placing focus on clean claim production can lead to decreased denials, faster payments, and lower A/R days. The following is a list of seven clean claims best practices to implement in your organization’s revenue management.
1. Verify patient demographics & insurance coverage with every encounter
As the first point of contact, patient access plays a critical part in ensuring a claim is submitted without errors. According to the National Association of Healthcare Access Management (NAHAM), over 70% of the CMS-1450 or UB-04 form is made up of data collected by the patient access team.2 If this data is incomplete, incorrect or outdated, you run the risk of having the claim denied and face hours of wasteful rework. It is imperative that both scheduling and registration staff follow best practices to confirm all patient demographics and insurance information. While this may sound simple enough, it is all too easy to skip this step when you see the same patient on a repeat basis. Taking the time, every time ensures that the claim, at the very least, starts clean.
2. Verify eligibility and secure preauthorization’s prior to the date of service (DOS)
Over 1 in 4 (26.6%) of claim denials are the result of an eligibility error.3 Verifying patient eligibility and securing any required preauthorization prior to the DOS is critical for clean claims and prompt payments. This can be done manually, which can be labor intensive, or you can leverage a technology partner to streamline the process. Being proactive during the initial stages of a claim allows your teams to operate more efficiently, versus wasting time and resources in rework for a denied claim. Not only does this increase the chances of producing a clean claim, but the transparency you afford your patients helps to increase your patient satisfaction as well.
3. Ensure proper maintenance of your Charge Description Master (CDM)
The CDM is at the heart of a healthy revenue cycle and to receive a clean bill of health, you must put your CDM through regular checkups. A typical hospital can have up to 500 annual CDM change requests, and large health systems many times that, which significantly increase the likelihood for error.4 Maintaining your CDM is an ongoing process; but, at a minimum, you should be monitoring and updating your CDM at least quarterly. This maintenance helps to ensure that your CDM is up to date with any Centers for Medicare & Medicaid Services (CMS) updates, pricing changes, and new procedures or drugs; all of which are necessary to produce a clean claim.
4. Analyze trends in your denied claims
According to the Medical Group Management Association (MGMA), 50%-60% of denied claims are never reworked.5 Besides the loss of revenue, not reworking denied claims sacrifices an immense amount of data. That data, when analyzed properly, has the potential to positively transform your claims process and prevent future denial reoccurrences. Using predictive modeling can help identify which denials to prioritize based on the probability they will be overturned on appeal. When reworking denied claims, root causes of the denial can be identified and trends can be categorized to better manage the claim inventory. Denial trends can then be solved for, edits made, and staff educated, resulting in cleaner claims out the door.
5. Implement a strategic framework centered on Education
Given that 80% of medical bills contain errors,6 it is imperative that the entirety of your revenue cycle staff is up to date on new processes, technology, legislation, etc. in our ever-changing world of healthcare finance. Misunderstandings by the front-line staff can lead to the occurrences of preventable errors which can affect more than your organization’s clean claim rate (CCR). Complete training of new staff needs to occur early in their employment. But it is not enough to rely solely on initial training received at time of employment or implementation. Education must be an ongoing process. Successfully adding a strategic framework with a focus on solving for the key moments of educational need can have a massive, positive effect on your revenue management.
6. Identify opportunities for automation across your revenue cycle
Human error is common when submitting claims and they can occur at any stage within the revenue cycle. Couple this with an understaffed workforce, and the need for automation is apparent. Yet over one in four (26%) of hospitals do not have an effective Revenue Management solution in place.7 Automating your revenue management end-to-end can drive clean claims and significantly reduce denials. When looking for a technology partner, ensure their solutions integrate with your system while addressing your organization’s revenue management needs.
7. Remember the clean claim process is an end-to-end process
A claim can be impacted by all stages of the revenue cycle (front, middle, and back); therefore, a claim has the potential to have errors or missing data at every stage. Technology and communication between all departments is key to maintaining a healthy end-to-end revenue management system. The monitoring and understanding of each department’s role in creating clean claims establishes accountability across the revenue cycle.
A sophisticated end-to-end revenue management approach produces cleaner claims, results in lower denials, and sustains a higher CCR. According to the Healthcare Financial Management Association (HFMA), a healthcare organization’s CCR is indicative of the quality of the data gathered and reported on a claim.8 As an industry standard you should strive to maintain a CCR of 95% or greater. A high CCR equals high quality data, which leads to decreased denials, lower A/R days, and faster payments.
Learn how nThrive is helping healthcare organizations produce clean claims on the first pass.
- Becker Hospital Review – “Denial rework costs providers $118 per claim: 4 takeaways
- NAHAM Connections – “We’re all in this together: Connecting the front end to the back end
- CHANGE Healthcare – “The Change Healthcare 2020 Revenue Cycle Denials Index
- hBecker’s Hospital Report – “Seven must-dos to ensure charge description master (cdm) success”
- MGMA – “You might be losing thousands of dollars per month in ‘unclean’ claims”
- Becker’s Hospital Review – “Medical billing errors growing, says Medical Billing Advocates of America
- Black Book Research – “Black Book: More than a quarter of U.S. hospitals still lack feasible RCM solutions, despite overwhelming evidence of their positive impact
- Ensuring the Revenue Cycle Gets a Clean Bill Of Health (hfma.org)