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Got another claim denial? We asked this question at the start, because most probably you are reading this guide due to frustration. Claims denials are frustrating and drain all your revenue. But guess what, you are not alone. OBGYN medical practices all across the country face countless denials every day. Insurance claim denials cause a loss of billions of dollars every year. Hospitals, small practices, and even companies offering OBGYN medical billing services are investing in technology and more streamlined systems. But the denials are still increasing instead of going down.
This might be surprising for you, but medical claims denial rates jumped to 11.8% in 2024, up from approximately 10.2% just a few years earlier. That’s a lot of money out of your pockets. Money is not the only problem. Denials eat away more than just revenue, disrupting your billing operations. They create a whole mess of administrative issues and bottlenecks in day-to-day operations. Modern billing software and platforms help streamline these processes.
Being honest, dealing with claim denials has become one of the biggest challenges for healthcare providers. That’s why we have created this guide on how to deal with denials. By the end of this very important piece of content, you will have a good idea of how to avoid claim denials and improve your revenue. So, let’s start.
Financial Impact of Claim Denials
Numbers don’t lie; insurance claim denials are expensive, and even more expensive to deal with. Hospitals and health systems spent an estimated $19.7 billion in 2022 trying to overturn denied claims. That’s billion with a “B,” and it represents just the cost of appeals, not the lost revenue from claims that never get resubmitted.
Like we said, reworking rejected claims is as expensive as the amount you lost on the claim. To be exact, that is between $25 and $181 per claim to rework and resubmit. You know what the worst part is? Problems caused by denials are not just limited to money. They tie up your staff’s time, make you wait for reimbursement, and also increase the administrative tasks by a lot.
Let’s discuss how you can improve your chances of preventing these denials.
Provide Complete Patient Data
Incomplete, missing, or incorrect patient data is probably the biggest cause of denials. According to a lot of surveys, 68% of the respondents said inaccurate or incomplete patient data at intake is a primary driver of denials. The data can include small details like Social Security numbers, incorrect insurance member IDs, outdated demographic information, or simple typos in patient names.
So, what should you do about it? Well, the first thing you should do is to focus on front-end verification. Train your registration staff to double-check every piece of information before the patient leaves your practice. Also, invest in software that can provide real-time eligibility verification.
Prior Authorization And Documentation Problems
Pre-authorization of services is common in practices that deal with procedures that have a high reimbursement amount, like cardiology or orthopedics. What many billers fail to do is get pre-authorization for these procedures on time. Mostly, they make this mistake due to a lack of knowledge and experience, and also the sheer amount of code. It is not possible for a person to remember which procedures require authorizations and which don’t
On the other hand, insurance companies are getting stricter about medical necessity requirements. Claims get denied when documentation doesn’t support why a particular treatment or service was required for the patient’s condition. It makes sense, because if your documentation does not prove the necessity, the payers will think you are trying to get money without any services.
So what is the solution to all these problems? Well, for starters, you can use tracking software for pre-authorizations. These systems can provide alerts whenever a CPT or ICD-10 code is used, which requires authorization. This way, your billers won’t have to remember everything.
You should also work with your physicians to ensure clinical notes clearly document the medical necessity for all services. This means including specific symptoms, diagnostic findings, and treatment rationales in patient records. Also, create standardized templates for documents. The templates will solve half of your problems.
Coding Inaccuracies
Now comes the part which is out of our control, i.e., coding inaccuracies. There are over 50,000 ICD-10 codes currently, and thousands of CPT codes, modifiers, NCCI edits, and a lot of other billing guidelines. Any medical biller can get confused when dealing with so many codes.
Plus, there are tens of different medical specialities, like cardiology, neurology, and endocrinology. Each of these specialities requires completely different codes and procedures. A general biller can not handle all specialties. This is why many practices rely on outsourced denial management companies like AnnexMed, whose teams are trained across specialty-specific coding and payer rules.
So, if you have a practice related to a specific specialty, try to hire billers who are experts in billing claims of that particular area.
Final Word
No matter how much you improve your in-house billing teams, they will never be able to compete with specialized billing vendors. So, the best solution is not to compete with these companies but to get help from them.
There are hundreds of different healthcare RCM companies that offer professional end-to-end medical billing and RCM services. It is best to get complete RCM solutions, but if you don’t have the budget, then you can simply opt for their denial management services.
