Woodcock Wisdom: Denials - Your Treasure Chest
We're extremely excited to introduce Elizabeth, a widely-reputed consultant, speaker and author who has championed improvement in medical practice operations and revenue cycle management for nearly 20 years.
When a claim is denied by an insurance company, it provokes frustration and anguish. Yet, these unpaid claims can also yield a significant benefit for your practice. By gathering data and reporting your denials, you can discover a treasure chest of information to improve your practice.
First, let’s understand the logistics of reporting. Since the mid-2000s, insurance companies have been using a common list of codes to identify denials. Called a Claim Adjustment Reason Code, but often referred to by its acronym, CARC, this distinct identification is tagged onto each denial at the level of a CPT®. (The insurer may also include a RARC – Remittance Advice Remark Code – which may be used to further define the reason for the denial.) When the insurer responds with a denial, it’s critical for your practice management system to be able to identify and demarcate the CARC for each denied CPT. This so-called “line-item” reporting is critical to developing the business intelligence needed to locate and leverage the treasure chest.
Over several weeks, or even months, you can compile intelligence about the type and volume of denials you’re getting. Categorize them based on the areas of your practice – “subscriber not eligible” would fall into your front office, while “no pre-authorization” might reside with your nursing team. These are just examples; the key is to categorize the denial based on its origination.
Armed with this business intelligence, you can assess the opportunity for performance improvement throughout your practice. Evaluate challenges that are leading to inaccuracies or mistakes. How and when are services identified that may require a precertification? Who is responsible for obtaining the precertification? Is the training adequate? Is the workflow surrounding the process to procure the precertification optimized? Is there a double check to ensure that the precertification is captured before the service is performed, to include procedures that are scheduled at the last minute? Who is held accountable for the process?
Denials can’t give you all of the answers, but reporting on them can lead you to a treasure chest of information to ensure that you capture every dollar you deserve.