Importance Of Denial Management In Healthcare: Strategies And Solutions

The denial management process

A straightforward denial management process becomes possible when many healthcare organizations do not resubmit claims, provided it is managed accurately. Managing denials requires identifying, analyzing, categorizing, resubmitting, tracking, establishing, and monitoring, all part of a cohesive process.

Identifying denial reasons

Identifying the leading causes behind claim denials, which include coding issues, missing data, late submissions, outside care, lack of authorization, and insufficient medical necessity, marks the initial step of the denial management process. Once the root causes are identified, next comes formulating action plans to prevent future denials.

Categorizing denials

After categorizing denials, creating effective prevention plans follows. Denials can be ordered by specific causes, such as:

Without prior authorization, a claim may be denied.
A denial may follow misinformation and poor coding.
Time frames exist for claim submissions among payers. Denial of the claim may occur if this deadline is missed.
Denied status awaits claims without insurance or medical necessity determination.

Other categories to consider are the types of claim denials, such as:

Soft denials: Temporary and without the need to appeal, such corrections may be paid.
Hard denial: An appeal process ensues after a denied claim causes monetary loss.
Preventable denial: Reasons such as code errors or insurance ineligibility can result in avoidable denials, which can be challenging.
Clinical denial: Despite a brutal denial, a claim is not paid if there’s no medical necessity.
Administrative denial: An explanation of why a claim was denied directly from the payer to your organization, a form of soft denial involved.

Upon categorizing denials, designating corrective action departments/teams is essential. Determining which denials are most pressing requires categorizing them. Limitations require this step to be used by all teams, who must prioritize resource utilization. Read More...