The denial process is an inherent component of the billing procedure at skilled nursing facilities (SNFs), yet its management is anything but. While what may appear to be a relatively insignificant amount of denied or improperly paid claims could eventually transform into a much bigger problem without appropriate actions being taken regularly. Denial management has long ceased to be just another step in the billing process for many facilities.
With billing processes becoming more complicated and unpredictable payers’ behaviors growing more challenging, the traditional ways of dealing with denials prove ineffective. That is why dedicated denial management solutions and expertise are now coming into play.
The Difference Between Basic Follow-Up and Structured Denial Management
For a lot of companies, denial management is incorporated within general follow-up for accounts receivable (AR). They check for outstanding claims, determine problems, and re-submit. Although this is effective, it is largely disorganized.
A more specific denial management strategy involves creating process that can be used for identifying denial categories, tracking denial trends within payers and claims, and prioritization of those that have the most effect.
Whereas the former only takes care of resolving denials, the latter concentrates on the trends. In case there are claims that are consistently denied for the same reason, this could help in fixing the problem upstream.
Identifying Root Causes Instead of Repeating Work
Another area which is very resource-consuming when dealing with denials management process is the need for reworks. The claims are fixed, resubmitted and follow-ups are made on several occasions until the underlying cause of the denial is discovered.
As an example, a denial due to missed authorization might seem obvious, but the real problem could be the failure of information update regarding the payers, or lack of internal departmental communication.
The Importance of Timely Denial Review
Timing is essential in denial management. The requirements set by the insurance company may be quite stringent, and failure to adhere to these will mean losing out completely on recovering revenues.
In a hectic environment, it is common for denials to queue until they are sorted. Time may have run out by the time this happens.
Denial management procedures usually prioritize denials according to deadline requirements and claim amounts.
Understanding Underpayments Alongside Denials
Not all revenue problems occur as outright denials. Underpayments can sometimes be harder to catch because there may not be any overt sign that the payment is wrong. The claim can be submitted and paid without any sign that the payment is wrong.
Denial management experts will usually assess payments along with denials by comparing the payment made to what should have been made.
This wider perspective allows for revenue that would have been missed to be recognized. It also offers further insights about how payers behave that can be used when billing in the future.
Coordination Between Clinical, Billing, and Administrative Teams
Denial management should be done through collaboration between various sections within the organization. For instance, while billing departments could detect the problem, the denial would need the involvement of the clinical team or the admissions team for it to be sorted out.
This means that a denial based on the medical necessity of the patient would need more documents or explanations from the clinical department. Just like that, an eligibility denial would require the admissions department or the front end processes to be solved.
Denial management becomes systematic through such processes, as opposed to doing everything in isolation. There are established procedures which help to minimize time wastage.
The Impact on Accounts Receivable
The existence of denials has an effect on the accounts receivable process. The claims will remain unresolved for longer periods of time, resulting in more AR days and less clarity of real cash flow. An increase in the number of denials makes the effect even more noticeable.
The better handling of denials helps to decrease the number of aged claims and makes collection process more predictable. This approach does not provide for immediate growth in revenue, however.
Why SNFs Are Turning to Specialized Support
There is no one factor driving the increased use of denial management professionals. The use of these specialists is due to multiple challenges, such as limited staffing, billing complexities, and the necessity for more consistency.
In order to train the staff to handle denials, there is a necessity to spend some time to develop necessary skills, which will be quite challenging. The specialists are already familiar with payers’ behavior and denials management within SNF.
It does not mean that there is no need for internal control anymore.
A Practical Approach to an Ongoing Challenge
Denial management in SNFs is not likely going to get any easier in the coming years. Payers keep changing their demands and the amount of paperwork required remains very high. Instead of trying to find ways of eliminating all denials, the goal now seems to be how to manage them better.
One such solution for that can be specialized denial management. The structured, consistent and experienced approach will help in identifying the problem areas in advance and avoid mistakes in billing.
