Achieving Clean Medical Claims at First Submission in 2021

According to the Change Healthcare 2020 Revenue Cycle Denials Index, since the beginning of the coronavirus disease 2019 (COVID-19) pandemic, medical claim denials have increased 11% nationwide, with the highest denial rates in regions with the highest first wave of COVID outbreaks. As compared with 2016, the third quarter of 2020 shows a 23% rise in total medical claim denials and an 11.1% increase in the national rate of claims denied on initial submission, reported the American Journal for Managed Care.

As the “new normal” arrives, how do the events of the past year continue to impact medical practices and billers? Specifically, how has the pandemic era changed the nature of claims, reimbursement, and cash flow, and what can we expect going forward?

Many factors cause medical claims to be denied. They include a lack of resources for denials, such as expertise to support appeals and data for root cause analysis, as well as staff attrition and training, growing denials backlog, and legacy technology. Front-end processes that result in clean claims – claims in the right format and with the right information accepted by that payer -- include staff education and training, the use of advanced technology and the use of appropriate resources.

“If you do not have a clean claim, you will not get paid,” explained Elizabeth Woodcock, MBA, FACMPE, CPC, principal of Atlanta-based Woodcock & Associates, who will present a Kareo webinar on May 12, 2020. Woodcock, who has focused on revenue cycle management (RCM) for more than 25 years, explained that a claim form typically encompasses as many as 35 fields. Achieving a clean claim on the first try means conforming to the expectations and policies of the payer, understanding that those expectations are different for every payer and knowing that the requirements are becoming exceedingly complex, especially since the pandemic began.

Somewhere between 5 and 10% of claims are not payable because something is wrong with them. Billers need to know why they were denied, what is the root cause of the problem and how to fix it.

Telehealth and COVID have changed reimbursement protocols, Woodcock said. The emergence of telehealth has increased the complexity of billing with new codes, new modifiers, and new data to input. The transition to work from home and personnel shortages have caused delays on both ends of the billing process. Morale has been a challenge to productivity and RCM since the pandemic began.

Woodcock added that there is confusion as to financial responsibility -- what is due from patients and what is not. The Families and Coronavirus Response Act made public and private payers waive responsibility for COVID care, laid the groundwork for consumers to wonder what they have to pay for and forced practices to make sure that they are gently but appropriately collecting from patients.

“Billing is always complicated, but now there are extra issues about what is waived, creating an even more complicated landscape,” Woodcock said. “Now, more than ever, knowledge is power. The upside is that now we can employ anyone in the world remotely to find the right people to manage and attack the process.”

Woodcock believes that there is an economic incentive for insurance companies to retain the complexity, because less than 10 companies control the pursing of healthcare in the United States. Understanding payment policies and protocols and maintaining an action plan to keep abreast of reimbursement policies is critical to having clean claims.

She said, “Payers send out memos once a month summarizing the last month’s changes. You have to learn each and every day and proactively stay on top of the process. Stay completely in tune with what providers are doing, ask questions and have great technology to back you up. A human being can’t process all of this information, so you need good technology.”

To make things even more complicated, some employers provide coverage for certain medical services while others do not. It is almost as if each patient has a different insurance policy, according to Woodcock.

She concluded, “This is what we have always dealt with in RCM. We need to be knowledgeable, proactive and vigilant. We have to have a constant plan, study, do, act – PDSA – cycle. More training and better technology will help us to achieve clean claims the first time.”

In the webinar, Woodcock will review how the continuing public health crisis will impact RCM, identify the root causes of rejections and denials, provide the top five prevention strategies to implement with the team and help to create a plan of action to ensure clean claims. She will help billers to determine where denials are originating and why and prioritize remediation based on where and what actions will have the greatest impact.

Now more than ever, you and your team need to be submitting clean claims the first time. Register now for our webinar, What Your Need to Know to Achieve Clean Claims in 2021 and click here to register. You can also read more about what healthcare professionals need to know about getting paid in 2021 by downloading our free guide here.