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Coding Denials: 4 Strategies for Maximizing Cash

There are really only a handful of possible outcomes when a claim is being processed. It may be paid correctly, paid incorrectly or go unpaid. And, of course, it may be denied.

Denied. There are many reasons a claim might be denied, and no coder or coding department is exempt from having claims denied. It happens to the best of the best and to all the rest. 


In fact, nearly 30% of total filed claims are denied due to minor errors in coding and technical aspects. That doesn’t take into account the many more that are denied due to registration or billing issues. The real question is, given that the average claim denial costs $25, how can we minimize the loss that results from coding claim denials?

In this post we outline seven strategies for maximizing cash by minimizing coding denials, we've inserted several training tips for coders along the way. Let's start at the baseline...

Code It Right the First Time

The most obvious way to keep denied claims below the MGMA benchmark of 4% is to send out a clean claim the first time. While this requires attention to detail, it also requires making sure the right people with the right training are in the right positions within your coding departments and business offices.

Coders should have focused training not only in coding but also in the particular specialty in which they are coding. The coding discipline is both comprehensive and layered, so while all coders must comply with the same set of general guidelines, each specialty also has its own set of rules.

To complicate matters further, each payer has its unique claims submission requirements as well as its own proprietary medical policies. It’s very difficult to understand—and apply—every rule for every payer. Just thinking about it can be maddening. Here’s an alternative: understand the provisions for your organization’s top five payers and remember Medicare sets the standard.

Training Tip #1: Everyone from intake to collections plays a role in creating a clean claim.

Rules and policies aside, communication among departments within an organization can also affect the volume and frequency of coding-related denials. Coders speak a language different from their colleagues in patient accounting and claims processing departments. Yet, when they understand the interdependence of their roles as well as their intrinsic value to revenue cycle as a whole, working toward the same goal—payment of claims—becomes clear. When departments communicate clearly and regularly, claims are submitted correctly and paid more quickly, more often.

Try Triage as a Methodology

Sounds serious, doesn’t it? The term triage is defined as “the assignment of degrees of urgency to wounds or illnesses to decide the order of treatment of a large number of patients.” Typically, triage is used in reference to patient care but it’s just as important to the revenue cycle, especially when there is a backlog of denials.

When a systemic problem with denials exists, try triage. Identify the barriers to claims processing and prioritize those areas. For instance, if several claims are held or denied for registration issues such as incorrect ID, eligibility, coverage termination, or group number, then training is needed for the staff responsible for intake.

If claims are rejected for modifier usage, specificity, or sequencing, then training is needed for your coding department. Denials also occur for failure to pre-certify or preauthorize, fee schedule issues, duplicate claims, and so on. These are general billing issues that are handled by your patient accounting office.

Training Tip #2: Not everyone processes information the same way. 

Incorporating a variety of learning styles into your coding training model can prevent a coder from being left behind. Clearly, there are many ways to go wrong. Identifying areas of concern and addressing them with training and education will minimize denials that would otherwise slow down your revenue stream.

Train, Train, Train

Educating the coding team is a never-ending process, as the discipline is constantly changing. Failure to keep up will result in paying for these deficits in more ways than one: reduction of revenue, penalties for noncompliance, pre-payment audits, and post-payment audits.

And that’s why credentialed coders are critical to every team, regardless of size and scope. Coders actually reduce an organization’s risk because they understand coding conventions in various code sets and because they are required to take continuing education credits annually to maintain their credentials.

One survey indicated that only half of the medical billers and coders are certified; however, considering the increasing competition and coding regulations, certification is expected to become a necessity by 2020 with employers requiring applicants to hold certifications before hiring.

Among many coding credentialing entities, the American Academy of Professional Coders (AAPC) and the American Health Information Management Association (AHIMA) are nationally recognized and considered the standard for coding.

While certification and continuing education are vital to keeping up with edits, regulations, and changes in payer policies, it is also essential to have specialty-specific training. Staying current with the changes unique to a specialty will help maintain the efficiency of the revenue cycle.


Stop Making Silly Mistakes

Denials received from payers are inevitable. To minimize avoidable denials and improve turnaround time, focus on decreasing the number of “little” mistakes, as they have far-reaching effects.

Again, making sure you have well-trained staff who see the big picture—the role of coding in the revenue cycle—is paramount. Coders must understand the importance of entering patient data correctly into the system and know how to trouble-shoot when a problem does arise. Beyond the big picture, though, painstaking attention to detail is a desirable trait among coders. Why? Because transposing a number when entering a date-of-birth or insurance ID causes claim rejection just as easily as using the wrong modifier or ICD-9 code.

Training Tip #3: There are three main types of adult learning styles: visual, auditory, and kinesthetic. 

Incorporate all three into your training model for coders. Precertification is another small step in a larger process that can have a detrimental effect on your A/R. Most managed care organizations necessitate approval for certain procedures and admissions; without it, payment will be denied. Be sure you have a process in place so that neither pre-certifications for admissions nor prior authorizations for procedures fall through the cracks.

All That Said, Expect Denials

There are some denials that are destined to occur no matter how diligent you are in submitting clean claims. Without question, the most dreaded denial is “not medically necessary.”

Stay on top of "not medically necessary" denials by taking steps to appeal them as they occur.

Coding-denials-whitepaper.pngFirst and foremost, make sure the claim is indeed medically necessary. This may require some research on the part of your coding staff or even a query to the provider. Once you have verified that the coding is correct, the documentation is adequate and the medical decision-making is appropriate, proceed with filing the appeal. Supply the appropriate medical records and, if necessary, include articles, images, or even a letter from the provider to support the reason for the service.

Another common source of denials occurs when providers submit claims directly via their electronic medical record (EMR), thinking that their claims are being submitted accurately. In truth, that’s often not the case, but these occurrences can be minimized by having a strong audit protocol in place. When coders and providers work together, a clean claim is more likely. Further, educating providers on documentation practices can enhance best-practice coding methods.

Not allowing a coding denials backlog to build is definitely best practice, yet many coders find themselves struggling with too many denials, too much coding work in general, and/or too little time.

Attack Backlog—NOW!

What if you are way behind? If you are drowning in coding-related denials, you have multiple options: lighter fluid and a match, prioritizing your work, or asking for help.

While most coders would be more than happy to eliminate their denials via fire, this approach is actually not recommended. Acknowledging the awfulness of working coding denials, though, is the first step in making them manageable.

It’s common practice among coders to address denials last— after coding and submitting charges, after answering emails and phone calls, and after every other assigned task, including a walk down the hall or around the block for an afternoon latte. Working coding denials is just plain undesirable. But, it’s still important to the revenue cycle because it quickly brings in revenue that would otherwise be lost. Paying attention to corrected claim timeframes, appeals deadlines and timely filing limits keep denials moving toward the overall goal: PAYMENT! 

Training Tip #4: don't allow THE OVERWHELMING volume of DENIALS work to stagnate your coders. 

Try these tactics to force coding denials work back to the top of the to-do list:

  • Block out time daily to work backlogs.
  • Break down the sheer volume of coding denials into manageable chunks to make the task more palatable and attainable.
  • Measure results at the bottom line. If you track the payments received as a result of coding denials worked, you’ll find validation in making this tough task a priority.

Knowing when to ask for help is also critical. If daily prioritization of coding denials isn’t enough, consider a proven coding partner to manage this aspect of your revenue cycle.

Share the Workload

More and more providers are looking for proven partners to serve as extensions of all or a portion of their revenue cycle operations, and coding is no exception. Knowing when and why to consider an external partner is important, because even if one is not the right fit for your organization today, it may be in the future.

results from coding claim denials.jpg

An honest look at the sheer volume of coding work is a good place to start, and backlogs are a primary indicator. Also, consider whether there have been significant staffing changes, or if coding is generally understaffed. Finally, pay attention to increases in the number of providers, both sudden and gradual. If growth in coding has not mirrored growth in providers, coding will inevitably fall behind.

While there are many outsourcing options from which providers can choose, taking time to assess your organization’s true needs should always be the first step.

  • Evaluate coding operations as a whole and identify gaps that may be causing delays.
  • Look at the full picture and formulate a plan for where your organization is going in the future. Do you anticipate an increase in claims through increased patient volume? Will you add another provider or service option (MRI, physical therapy, etc.)?
  • Use what you learned about the needs of the organization to create a list of potential vendors.

Finally, look for a partner, not a vendor. Everyone who comes into contact with your patient information must be on the same page, holding to your philosophy on both patient care as well as your revenue cycle priorities. A true partner will hold to your values and act as a seamless extension of your coding operation.

Conclusion: Start Today!

Having a tried-and-true process in place for managing denials will affect a provider’s bottom line. How? Clean claims get paid faster. Improvements to internal workflows and commitments to staff training both result in increased productivity, which reduces costs.

Distinguishing between avoidable and unavoidable denials, and having a systematic workflow for each saves time, and time is money. And, last but not least, finding a proven revenue cycle partner experienced in coding may be the silver bullet to clearing the backlog and paving the way to restoring and maintaining optimal revenue cycle health.


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