Five ways to prevent and manage denials on the front end

By Kevin Smith, nThrive Vice President, Product Management | Posted: 02/21/2018

Are you struggling to financially clear patients on the front end? If so, this could be the root cause for claim denials at the back end of your revenue cycle.

It is estimated that approximately 90 percent of denials are preventable, with a staggering one in five claims delayed or denied by payors today. With industry average denial rates estimated between five to 10 percent, this is a key source of leakage that can and should be addressed upfront to reduce overall costs.

Errors or omission during registration, from providing a wrong address to lack of prior authorization, can result in a denial, with the average cost of rework estimated at $25 per claim, averaging three percent in lost revenue yearly.

For providers who are struggling with low margins and trying to just break even, reducing preventable denials is a quick way to increase revenue and improve cash flow, relieving financial stress and ultimately helping to better serve patients.

Here are the top five check points every health care organization should be doing on the front end to eliminate denials down the line:

  1. Verify patients are who they say are and live where they say they do
  2. Determine if patients are insured and, if so, establish what is and isn’t covered
  3. Provide an accurate estimate to establish any out-of-pocket patient expenses
  4. Make sure any prior authorization requirements are fulfilled upfront
  5. Ensure that an Advanced Beneficiary Notice (ABN) is on file to submit claims

1: Address and ID validation

While it may seem like a no-brainer, discrepancies related to a patient’s identity and place of residence are a common cause of claim denials. Organizations should confirm that patient identity matches an appropriate address to protect against identity theft and improve revenue recovery after the fact.

Key information to confirm includes name, address, social security number and date of birth. Automation can help confirm in real-time and raise any red flags that may need to be further explored.

2: Eligibility and Benefits verification

With so many different insurance options now available to patients, it can be challenging if not impossible to manually identify both what is covered – and what is not. This is where having access to a comprehensive database of payors can make all the difference, enabling Patient Access staff to accurately verify patient coverage and benefits in an easy-to-read, normalized view.

3: Patient bill estimation

Automation further enables accurate bill estimation, which is becoming a legal requirement in many states. Utilizing software that combines information from payor contracts, historic charges and patient benefits, arms your staff with the information they need both to confirm coverage and to provide accurate estimating. An added benefit is the ability to discuss the patient’s out-of-pocket obligation and payment options, which are proven to increase point-of-service (POS) collections on co-pays, deductibles and other expenses.

4: Prior authorization

Along with visibility into specific insurance coverage, an automated approach also flags requirements for prior authorization, helping to ensuring compliance with a patient’s specific plan. Failing to gain prior authorization can be a costly mistake resulting in a preventable denial.

5: Advanced Beneficiary Notice (ABN)

Like prior authorization, it should be standard practice at registration to ensure all necessary paperwork is in place, including an ABN to full comply with all of the Medical Necessity rules required by the Centers for Medicare and Medicaid Services (CMS). This step not only helps your organization avoid fines, it is integral to obtaining timely reimbursement for provided services.

Incorporate registration quality assurance (QA)

Organizations that also incorporate a registration QA in their process, double-checking that all five actions have been taken prior to service, are assured the highest performance outcome. It stands to reason that the more steps you perform, the higher the likelihood you’ll prevent a denial, decrease rework costs and improve collections.

To operate at this level, a highly trained Patient Access staff is also becoming a pre-requisite. While the role of the Patient Access employee was once considered among the lowest-skill, entry-level jobs in a health organization, this is changing. High-performing organizations are recognizing the need for training to bring these resources up-to-speed on use of technology, as well as effective communication skills to interact with patients on financial matters.

nThrive can help you raise the functional level of your Patient Access operation to prevent denials, lower costs and improve revenue. To learn more about how we can help, visit us here.

Kevin Smith, Vice President of Product Management & Strategy

In this role, Smith leads the Patient Access Product Suite, including the industry-leading CarePricer and Charge Integrity product suite, and is responsible for the full product life-cycle management of these solutions. 

Smith joined nThrive in 2012, bringing 20 years of experience in product management, strategy, and technology to his role, having held positions at Intel, Dell, and most recently Fiserv before joining nThrive. 

Smith is a graduate of Kelley School of Business at Indiana University with an MBA and bachelor’s degree in Finance. He is also a certified HFMA Revenue Cycle Representative.