How to overcome common claims management challenges

Reimbursement in healthcare has witnessed a concerning trend: an alarming surge in claim denials, primarily attributed to consistent claims management challenges.

The intricacies of claims processing, validation, and documentation – as well as frequent payer rule changes – leave providers vulnerable to errors that lead to downstream denials. The following are some of the most common claims management headaches providers face, what causes them, and how to overcome them with data-driven solutions.

Common claims management challenges

Incorrect patient information is one reason claims are denied. Having the wrong patient data is often a result of manual processes; human error gets in the way of efficiently creating and submitting claims. These errors can include anything from a wrong patient address, a blank field, or even a missing modifier on a claim. What may seem like a small issue adds up. In fact, 48% of participants in a recent survey said that identifying errors before claims submission is their biggest claims management challenge.¹

Another common reason for denied claims is lack of prior authorization. This is a growing challenge, as 79% of medical practices say that prior authorization requirements have increased over the past year. With ongoing complexity in front-end revenue cycle processes, it’s even more critical to get everything from patient access to payment capture as accurate as possible, as smoothly as possible.

Rising claims denials

Considering the challenges noted above, it’s no surprise claims denials have been soaring. Last year alone, the average-sized health system experienced an 11% denial rate, which translates to 110,000 unpaid claims.

However, over the last five years, denials for hospitals have increased by over 20%. This causes costly reimbursement delays, and in some cases, results in uncompensated care.

Denials aren’t only increasing in volume, but in cost as well. The dollar value of denials increased by 67% in 2022 alone. With the number and cost of claims denials on the rise, revenue cycle leaders are searching for solutions to control costs and ensure a smoother claims management process.

Improving claims management accuracy and efficiency

The first line of defense against claims denials is accurate and thorough patient information collection. Comprehensive patient data should then be reviewed and verified prior to submission to the payer. As the saying goes, an ounce of prevention is worth a pound of cure.

Denial prevention training for all revenue cycle staff is another great strategy. Helping staff understand where common claims errors occur and how they can impact the claims process (for better or worse) encourages engagement and ownership of their role in the process.

With Inovalon Claims Management Pro, billers can stay one step ahead of common claims management challenges. The solution empowers providers with automatic eligibility verification to double-check the accuracy of patient coverage, as well as checking the claim against the most current payer rules. If there are errors or missing information on a claim, staff is alerted before the claim goes to the payer.

Reporting capabilities within Claims Management Pro also help billers track where their claims are and easily identify claims that need to be reworked. With all these features, this easy-to-use software helps providers achieve a 99% or better clean claims rate.² And when paired with RCM Intelligence, providers can improve their first-pass yield rate to 93%!³

Transform your claims management process with Inovalon

Without question, claims denials are the biggest challenge to healthcare providers. The combination of human error, payer rule changes, or any number of other missteps, can put your reimbursements at risk.

Fortunately, automating the claims management process helps ensure accuracy upfront to prevent denials later. With the right software, claims can go from stuck and unpaid to submitted and fully reimbursed.

Request a demo to see how to create cleaner claims and receive faster reimbursements.

Sources:

¹ Inovalon claims management survey of healthcare providers, June 2021
² Inovalon internal reporting, Claims Management Pro, July 2022
³ Inovalon internal reporting. Average of customer results, April 2023
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