Top Challenges in Hospital Denial Management

By Bill Knox | Posted: 07/05/2017

Written by nThrive Vice President of Product Management, Bill Knox

A number of recent trends in the health care market have escalated the urgent issue of hospital denial management. Hospitals are struggling to collect every dollar they are owed, and each of these new developments poses an added threat.

1. Requirement complexity is on the rise.

Insurance companies are adding increasingly complex requirements into contracts with providers. Organizations are seeing up to 20 percent of claims come back with an initial denial. That means providers have to rework, or appeal, one out of every five claims. This constant rework distracts from care and inhibits revenue cycle improvement initiatives.

2. Patient responsibility is increasing.

Insurers and employers are putting more pressure on the patient, via high deductible health plans and other methods, to share the responsibility of the payment. From 2011 to 2016, the percentage of American adults enrolled in high deductible health plans increased almost 50 percent, increasing patient payment portions, which are generally harder to collect in a timely manner than commercial or government payor portions. Denials prevention and resolution programs to maximize insurance collections are escalating in necessity in order attain revenue cycle vitality.

3. Margin pressures due to value-based initiatives are a risk to revenue cycles and affect overall profitability.

While value-based care has positive implications for efficiency and cost savings long-term, it also means certain service lines may not be as profitable as they historically were, resulting from efforts to standardize cost and payments. It is imperative that hospitals reduce their overall overhead, including costs associated with their denials management initiatives.

4. Outdated denials management software.

According to a HIMSS Analytics 2016 survey, approximately one-third of health care providers still use a manual claim denials management process. Hospitals have been slow to adopt denials management software, and many still rely on outdated paper-based processes or databases they may have developed in-house, but which lack the automation and decision support to help optimize denials management.

Regulatory changes are going to persist; these problems will continue to plague hospital denials management. But the right denials management solution – a blend of service and technology – can address issues before they become unmanageable. Click here to learn the top five reasons for denials.