Reduce Claim Denials: An Overview of Process Improvement Strategies

Are claim denials causing financial headaches for your healthcare organization? Are you curious about how other healthcare providers resolve these denial issues? If so, it is likely because you need to follow some common process improvement strategies. 

Indeed, process improvement strategies are an essential part of any claim denial process. It can reduce the number of claim denials you face and improve your chances of winning a case. So, we will explore some of the different techniques and critical points that can help you achieve these.

What are Healthcare Claim Denials?

Healthcare claim denials occur when a healthcare provider submits a claim to an insurance company or payer for reimbursement. The claim can either be rejected or denied due to a variety of reasons. 

In fact, these denials are a pervasive issue in the United States. Some estimates suggest that insurance companies deny up to 30% of all claims. This significantly affects healthcare providers, patients, and the entire healthcare system.

Importance of Reducing Claim Denials

Healthcare claim denials have a significant impact on healthcare providers. It not only affects the provider’s cash flow but also their ability to provide timely care to patients. 

Reducing healthcare claims is important since it allows healthcare providers to save on time and allocate more resources to providing better patient care. In addition to improving relationship with patients, it also enhances the communication and collaboration between providers and payers.

Understanding the Root Causes of Claim Denials

Common Causes of Claim Denials

  1. Incomplete or Inaccurate Patient Information

Errors can include patients’ demographics, insurance coverage, or missing medical records.

  1. Coding Errors

Healthcare providers must use correct coding and billing practices to ensure the submitted claims are accurate.

  1. Missing or Incomplete Documentation

Meanwhile, this can include medical records, prior authorization forms, or other supporting documents.

  1. Non-Covered Services

Providers must verify coverage first before providing services to avoid non-covered claims.

  1. Claims Filed Outside of the Timely Filing Limit

Payers have strict timelines for submitting claims, which may be denied if presented outside this window.

  1. Duplicate Billing

This occurs when the provider submits a claim twice for the same service.


Analyzing the Root Causes of Denials

It is important to not only identify but also analyze the root causes of the claim denials. One effective way is to conduct a claims audit, which involves looking at frequently denied procedures, payers, or billing codes. 

By doing so, healthcare providers can identify patterns or trends in the types of denials and their reasons.

By identifying the patterns or trends in the claim denials, providers can take action to address them. This may involve reviewing policies to identify areas for improvement or providing staff training to improve coding and billing practices.

Data analytics is another approach to analyzing denials by reviewing metrics such as claim volume, processing times, and denial rates. Providers can also seek feedback from staff involved in claims, such as billing and coding specialists and denial management specialists.

Steps for Process Improvement

  1. Establish a Process Improvement Team

A team of stakeholders– from billing and coding, clinical, up to the admin— should be established to work together in improving the processes.

  1. Define Measurable Goals

Once the process improvement team has been established, goals that are specific, measurable, and achievable should be created to reduce claim denials.

  1. Identify and Implement Best Practices

The next step for the team is to analyze data, research the industry, and then do staff feedback to determine the best practices.

  1. Regularly Monitor and Measure Performance

Then, the team should track denial rates, processing times, and other metrics to regularly review and identify process improvement areas.

  1. Develop Effective Communication Strategies

Lastly, communication, such as staff meetings, training, and emails, is essential to ensure staff awareness and implementation of process improvements.

Technology Solutions

Use of Artificial Intelligence and Machine Learning

What’s more, AI and machine learning can pinpoint claims trends and predict denials, enabling providers to prioritize efforts for reducing rejections.

Automation of Claims Processing

Automating the claims process, such as electronic submission, eligibility checks, and code assignment, makes it faster, more accurate, and easier.

Real-Time Eligibility Verification

This verification can prevent claim issues by identifying incorrect information, such as expired coverage or wrong patient ID, before submission.

Electronic Remittance Advice (ERA)

ERA simplifies payment processing by receiving payment information and explanation of benefits (EOB) electronically. As a result, it eliminates manual data entry and paper processing.

Staff Training and Education

Healthcare providers must also provide continuous training and education for claims staff to stay informed of the latest policies and reduce errors.

Then, providers should evaluate staff training needs and develop targeted programs to address coding, billing, documentation, insurance regulations, and communication.

Providers can also use the following strategies for efficient staff training and education:

  • Classroom Training. This traditional strategy can help deliver information and allow group discussion and interaction.
  • Online Training. This cost-effective way allows staff members to access their training anytime and anywhere.
  • On-The-Job Training. This effective strategy also provides staff members with hands-on experience and learning by doing.

Peer Mentoring. This strategy effectively provides support and guidance to staff members and then allows informal knowledge sharing.

Collaboration with Payers to Reduce Denials

Building Relationships with Payers

Providers should proactively reach out to payers to foster open communication and enable collaborative problem-solving.

Establishing a Feedback Loop

Together with payers, providers can address problems with the claims process by sharing data, information, and feedback.

Collaboration on Process Improvements

Providers and payers can jointly develop best practices, utilize new technologies, and exchange data to recognize potential improvements.

Final Thoughts

Overall, reducing claim denials is a critical aspect of improving the efficiency of the claims process. Analyzing the root causes of denials and implementing process improvements are some of the steps that healthcare providers can take to decrease claim denials.

Providing staff training and education, in addition to collaborating with payers, is also important. Furthermore, providers can also leverage on technology solutions to improve accuracy and efficiency.

Choose Phoenix Virtual Solutions to receive your payments accurately and on time. Our denial management specialist can help implement ways to keep all stakeholders involved with the claims process informed of any changes. They can work alongside other staff members of the revenue cycle team. 

Our team of experts in the denial management process can offer a comprehensive range of services. They use a data-driven approach to develop targeted solutions that work.

So, don’t let claim denials get in your way of financial health and patient care. Schedule a free consultation for process improvement solutions that work.

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