Have you noticed a trend of higher dollar account denials by payors? If not, let’s get you caught up on what others are experiencing. The growing trend of payors denying high dollar accounts is a pressing issue for healthcare finance. It’s not just about the dollars—it’s about ensuring that nothing is left unchecked.
In recent years, payors have increasingly shifted their focus to denying higher dollar charges. Statistics show a 54% increase in median denied charges year over year, compared to just an 18% increase in median charges for all accounts. To make matters worse, high dollar accounts (>$25,000) now make up a staggering 66% of denied revenue in Q1 2024. Typically, hospitals don’t pay as much attention to smaller dollar amounts, allowing that revenue to slip away. Now, denials are targeting higher dollar accounts, which can lead to large revenue losses for hospitals.
This growing trend highlights the need for healthcare providers to diligently assess their revenue cycle management strategies. Implementing more robust billing practices to prevent denials on the front-end and leveraging technology to streamline denial appeals on the back end is vital to preventing revenue leakage from denials.
To effectively combat this troubling trend, it's essential to first identify where the underlying problems lie. Denials for documentation, authorization, coding, credentialing, and non-covered services bundling have seen the highest increases in median denied charges.
Non-covered services and documentation issues can often be mitigated with proactive measures. By implementing best practices and ensuring thorough documentation, many of these denials can be avoided altogether. The more you invest in accurate coding and comprehensive documentation, the better off you’ll be in the long run—both in terms of financial health and operational efficiency.
It’s important to recognize that achieving this level of accuracy demands time and human resources. Investing in training for staff, ensuring your processes are current with the latest payer policies, adopting robust documentation systems, and prioritizing accurate coding processes can yield significant benefits. While it may require upfront investment, these efforts can help avoid the costly consequences of denials, ensuring a smoother revenue cycle process and leading to better patient care and satisfaction.
We've known about these issues for a while, but the increasing rate at which payors are denying high dollar accounts is a surprise. It's time to act.
One health system experienced a notable spike in denials after a leadership change, highlighting the importance of team alignment. When your team isn’t aligned, you can overlook crucial insights that can impact the entire revenue cycle. It’s essential to foster a data-driven environment where teams are constantly monitoring trends, taking immediate action, and aligned with team goals. A partner like PMMC can provide you insights and information on trends, leaving your team time to manage your regular workflow.
Understanding who is responsible for your billing and coding is vital for your organization's financial health. Do they possess the necessary skills to maintain accuracy and compliance? Having confidence in your billing team’s capabilities is crucial, as accurate billing and coding are foundational in preventing denials. Consider regular training and updates to keep your team informed about the latest regulations and best practices in billing and coding to ensure they perform their roles effectively. Utilizing software and analytics from an experienced partner can help you prepare. A partner can ensure you are ready to tackle high dollar denials with accurate software, services and guidance. Additionally, leverage technology to improve the speed and accuracy of the billing and coding process. A partner can help you use data and technology to combat denials effectively.
Collaborating with a partner like PMMC can significantly enhance the accuracy and effectiveness of your revenue cycle management. As your guide, we share our expertise ensuring that you remain informed and proactive at every stage of the process. By leveraging their knowledge of industry trends, technology solutions and shifting payor denial strategies, you can implement best practices that help mitigate potential issues before they arise. This partnership not only aids in reducing denials but also fosters a more streamlined and efficient revenue cycle overall.
High dollar account denials by payors are a growing concern that can significantly impact your hospital’s revenue. By focusing on key areas like documentation, authorization, coding, credentialing, and non-covered services, and involving your team in the process, you can combat this trend effectively.
Don't wait for the problem to escalate further. Take proactive steps now to ensure your hospital gets paid for the services it provides. For more tailored solutions, consider partnering with experts like PMMC who can guide you every step of the way.