Top 6 Reasons Healthcare Claim Denials are Increasing and How to Fix Them

Imagine this: you walk out of a doctor's appointment feeling relieved, expecting a smooth reimbursement process. A denial letter lands in your mailbox weeks later, leaving you confused and frustrated. Unfortunately, this scenario is becoming increasingly common across the healthcare landscape, with claim denials reaching record-high numbers. This translates to billions of dollars in lost revenue for healthcare providers and significant stress for patients.

Claim denials pose a silent threat to both your bottom line and patient experience. They create administrative hassles, slow down cash flow, and can confuse and frustrate patients. It is a problem demanding attention, not just acknowledgment.

That is why this blog post will dive deep into understanding the "why" behind claim denials and "how" to improve the claims adjudication process. We will go beyond operational challenges and explore the broader systemic issues contributing to this growing problem surrounding claims processing. We will also offer actionable solutions to empower you to take control, navigate this landscape, and implement a better patient care management system. Let us get started.

Claim Denials: A Growing Pain Point for Your Practice

The following are the key factors driving this widespread challenge:

The Financial Strain 

• Lost revenue: Each denied claim directly impacts on your bottom line, delaying further investments in services, technology, and staffing.
• Increased burden: Appealing denials requires valuable time, resources, and skilled personnel, adding to team effort.
• Cash flow disruptions: Delayed reimbursements create a ripple effect, slowing your cash flow and making it harder to cover operational expenses.

Read more: Learn Why Denial Management Needs More Focus Today | Mirra HC

Breaking Down the Causes

Denials stem from several reasons, including the operational challenges identified in Experian Health's report on The State of Claims 2022:

• Data Deficiencies: 62% of healthcare organizations need more data and analytics technology to identify potential submission issues before they lead to denials.

• Automation Gap: 61% of respondents need more automation in claims submission and denial prevention, hindering efficiency and increasing error risk.

• Staff Training Needs: 46% reported insufficient staff training, potentially impacting coding accuracy and claim preparation.

• Denials Expertise Gap: 44% need more in-house expertise in denials management, limiting their ability to address and appeal denials proactively.

• Outdated Technology: 33% rely on outdated and inadequate technology, hindering efficient claim processing and data analysis.

• Staffing Shortages: 30% face staffing shortages, which can contribute to missed details, inaccuracies, and denials.

The Pandemic's Shadow 

The COVID-19 pandemic added unique challenges:

• Coding complexities: Rapid changes in coding for new procedures and treatments caused confusion and errors.

• Shifting regulations: Temporary policy changes and waivers added further complexity, increasing potential errors.

• Increased workload: Overburdened healthcare staff were more susceptible to making mistakes due to fatigue and pressure.

Understanding these causes and their interconnected effects is crucial to tackling the denial challenge effectively.

Read more: Understanding Preventive Strategy to Navigate Denial Management | Mirra HC

Beyond the Surface: The Hidden Forces Driving Denials

While operational challenges like outdated technology and staffing shortages are significant in claim denials, they are just the tip of the iceberg. Deeper systemic issues also contribute to this growing problem, requiring a broader perspective.

1. Regulatory Challenges: The healthcare regulatory environment is constantly evolving. New codes, complex policies, and changing interpretations create a challenging terrain for providers to navigate accurately. A missed regulation or misinterpreted rule can trigger a denial, impacting revenue and creating compliance headaches.

For example, in 2023, changes to reimbursement rates for specific procedures led to a surge in denials due to incorrect coding requirements. Staying ahead of these changes and ensuring accurate application requires significant resources and expertise.

2. Payer Policy Puzzles: Inconsistencies and ambiguities in payer policies further exacerbate the problem. Conflicting interpretations, unclear guidelines, and lack of standardization across different plans create confusion and uncertainty for providers. This ambiguity leaves room for denials based on subjective interpretations, making predicting, and preventing them difficult.

3. Siloed Communication and Lack of Collaboration: The need for more seamless communication and collaboration between providers, payers, and patients contributes significantly to the denial problem. Inefficient information exchange, slow feedback loops, and limited data sharing create opportunities for errors and misunderstandings. This fragmentation leads to missed authorizations, inaccurate claims, and denials that could be avoided with better communication.

For instance, a patient needs to remember to mention secondary insurance during registration, leading to a denied claim from the primary payer. Timely communication and cross-checking details could have prevented this issue entirely.

Empowering Your Practice with Effective Denial Prevention Strategies

Claim denials may seem like an inevitable headache, but you can significantly reduce their impact with the right tools and strategies. At Mirra Health Care, a leading third-party administrator in Florida, we go beyond simply managing denials; we empower your practice with a comprehensive solution that tackles the root causes at all levels.

1. Streamlining Processes and Minimizing Errors 

• Automated Claims Processing: Eliminate manual data entry and minimize errors with Mirra's robust claims adjudication system, which handles both paper and electronic claims seamlessly.

• Customized Configuration: Tailor claim processing rules to your specific needs and payer requirements, ensuring accurate adjudication and reduced denials due to policy inconsistencies.

• Built-in Edits: Leverage pre-configured edits based on over 40 million rules, including CMS NCCI edits, to automatically identify and flag potential errors for correction before submission.

2. Leveraging Data for Strategic Insights

• Global Search and Claims Overview: Quickly access and analyze claim details like diagnoses, procedures, and provider information through intuitive search functions and dashboard visualizations.

• Member Management and MOOP Tracking: Gain a comprehensive view of member coverage details, including prior authorization history and maximum out-of-pocket (MOOP) tracking, helping to prevent denials due to missing approvals or exceeded limits.

• Reporting and Analytics: Generate customizable reports on claim trends, denial patterns, and performance metrics to identify areas for improvement and adjust strategies accordingly.

Read more: Optimize Claims Processing with Mirra's Real-Time Adjudication | Mirra HC

3. Enhancing Communication and Collaboration 

• Integrated Payer Portals: Communicate directly with payers through secure portals for real-time claim status updates, authorization requests, and policy clarification, reducing delays and potential denials.

• Member Engagement Tools: Empower patients with self-service options to verify coverage, update demographics, resolve billing issues, mitigating denials caused by incorrect information.

• Prior Authorization Tracking: Track and manage prior authorization requests efficiently, ensuring timely approvals and avoiding denials due to missing or expired authorizations.

4. Partnering for Sustainable Success

Another remarkable thing about Mirra is that we do not just offer technology; we will become your trusted partner.

• Dedicated Support and Training: Our team of experts is available to answer your questions, provide comprehensive training, and guide you through every step of implementation and optimization.

• Flexible and Scalable Solutions: Choose from Mirra Health Care's ClaimsLite® and ClaiMaster® offerings to suit your practice size and needs, with seamless integration and upgrade options for future growth.

• Collaborative Approach: We work closely with your team to understand your unique challenges and develop a customized strategy that delivers results.

By implementing these comprehensive solutions, you can expect:

• Reduced Denial Rates: Experience a significant decrease in denials, improving your revenue cycle efficiency and bottom line.

• Faster Reimbursements: Get paid faster with fewer claims management errors, getting stuck in the denial cycle.

Read more: Benefits of Integrating Healthcare Claims Management | Mirra HC

• Improved Patient Satisfaction: Give your patients a smoother billing experience with fewer surprises and faster resolutions.

• Enhanced Operational Efficiency: Streamline workflows and processes, reducing administrative burden and staff stress.

The Bottom Line

Denials may be complex, but they do not have to be an insurmountable obstacle. With Mirra Health Care as your partner, you can reclaim control, optimize your revenue cycle, and create a win-win for your practice, patients, and bottom line.

Ready to empower your practice and take control of your claims adjudication process? Contact our experts today for a no-obligation consultation and see how we can help you achieve financial stability and patient satisfaction.