5 Ways to Improve Claim Denial Rates For Your Healthcare Center

Managing and organizing denied claims is one of the crucial medical billing operations that need close heed to quickly determine, resolve, recover and prevent denied claims. Undoubtedly, when seen from a closer lens, it’s a time-consuming and frustrating process, nevertheless, the fact that motivates us all is that about two-thirds of denials are recoverable.

A Claim Denial is the refusal of a request (by an individual or a service provider) from a payer regarding payment of the healthcare services obtained from a healthcare professional. 

While not all denials are hard ones (those that cannot be reversed or collected), there are many significant ways to prevent medical claims denials and improve your denial rates, amplifying your practice’s success ratio.

5 Significant Ways to Work on Medical Billing Claim Denials


# Determine the Popping Reasons for Denials in the First Place

As stated by MGMA (Medical Group Management Association), the average cost incurred in processing denied/rejected claims is $25 where most of the denials (around 50%-60%) are never resolved due to the lack of knowledge and procedures on how to sort and fix them.

“Denied Claims are Recoverable and nearly 90% of them are Preventable!”

With all that said, knowing the reasons for the occurrence of claim denials is the key to void all your pending unpaid or rejected denials and form the basis to correct and reprocess denied claims before they go old and lagging.


Certainly, the causes why claims get rejected or remain unpaid vary by specialty or by practice, thus, start by compiling adjustment reason codes. 

These inconsistent and mystifying codes will consume time and effort at the start, however, will render deep insights into the loopholes to target and lays the foundation for concreting a strategic denial management strategy. Map these codes with descriptions, identify the basic causes, and categorize denials as per the findings.

Some of the constituting reasons are:

-Duplicate claims
-Service(s) not covered
-Inappropriate supporting documentation
-Incorrect modifiers
-Patient eligibility expired
-Invalid procedures/diagnosis code
-Lack of medical necessity
-Wrong insurer billed
-Service provider isn’t an in-network provider
-Missing patient’s demographic data
-POS (place-of-service) doesn’t match the procedures
-Timely billing passed
-No prior-authorization/no referral

[Prefer Reading: “How to Optimize Cash Flow with RCM Best Practices?”]

# Know the Current Status of Denial Rates

Before digging to identify the patterns of denials and deducing a solid claims denial solution, it’s obligatory to keep a close eye on the current running rate of your denials. 

Ignoring denials inevitably leads to problems down the road, so it’s important to monitor and mitigate denials in the first place in order to reduce the overall denial rate to the industry norms of 3% to 5%.

So focus on calculating the current denial rate by adding the total amount of claims denied by payer(s) within a given period and divide the amount by the total amount of claims submitted with the regulatory time interval.

Say, if you are given:

-Time Interval: three months
-Total amount of claims denied: $10,000
-Total amount of claims submitted: $1,00,000

Thus, for the same given period of time, your denial rate calculates to be 10%.

# Implement an Ideal EHR/EMR Billing & Claims Management System

Revenue Cycle Management (RCM) is a valuable asset in the healthcare industry that needs a good approach to be well-balanced and tech-support to deliver cent percent satisfactory results.

Providers running manual processes for orchestrating their medical billing generally witness inaccuracies, increased AR days, pending claim denials, and ultimately run low on patient engagement. This requires service providers to opt for applying automated electronic health record systems (EHR) that boost billing and accelerate claims denials rate, leveraging your healthcare practice’s cash flow and revenue generation as a whole.

High-end automation techniques embedded in the EHR system quickly track the reason(s) for denials and immediately file an appeal for their processing, simultaneously contacting patients to take action on their own on termination of claims.

Powered by automation, modern EHR/EMR solutions are effective in rendering analytical insights that help to improve on KPI’s and medical billing and coding practices.  

# Use Technology & Analytics to Manage Claim Denials

Technology-driven solutions never fail in delivering expected business results while acquiring business intelligence and quantifying revenue growth. Data and analytics insights retrieved from automated software tools help you to streamline billing operations, syncing dependent and connected teams to keep a recorded track and report the progress of the applied techniques and solutions.


While tracking and integrating accounting functions, automation supported tools can get you down your medical billing denial rates by 4%, thus, reducing them even by a fraction of a percent can have a substantial impact on your organization’s bottom line.

[Prefer Reading: “Benefits of Outsourcing Revenue Cycle Management (RCM)”]

# Educate & Train Staff to Improve Patient Data Quality

The foundation of medical billing is laid by the front-office and back-office staff and employees who play a significant role in patient information collection. 

This implies, to smoothly run your practice’s operations and accelerate your billing cash flow, dedicated and updated proficient professionals are required to bolster your backend service activities.

Experts performing their skills must be trained periodically concerned with beneficial information related to the following:

-High accuracy in data entries

Collecting the right patient information, maintaining acute accuracy and precision is the most critical segment that helps to eliminate the probabilities of potential claim denials. Manual tasks are high on resulting errors where they miss keeping checks on patient eligibility, insurance coverage plans, copayments, etc. One can rely on eligibility tools that render real-time outputs concerning useful patient information with 100% precision.   

-Insurance policies and procedures

Staff must be updated with the policies and procedures to review all alerts and information received from payers. Say for insurance eligibility and coverage plan, the dedicated personnel must be aware of the payer-specific requirements in context with the codes like ICD 10, CPT, etc.

-Global medical billing processing rules & compliance

The industry standards and norms must be in the notice of each professional and expert working on a service provider’s RCM processes. One must adhere to the compliance rules and regulations to avoid service disruptions and inconvenience.

If you still face Denial Management challenges, Outsourcing becomes the next Feasible option to choose!

Outsourcing revenue cycle management to experts like NeSet Digital who have dedicated denials management teams can be a profitable, sustainable alternative.

“We had many claims we had to write off because they were too old and couldn’t be rebilled. Our medical receipts are so much higher now that we outsource our revenue cycle management, so it’s worth every penny.” 

– Joanne Gronquist, OD (Santa Barbara, CA)

NetSet is here to expand its helping hand to help you get out of the daily struggles by offering workable and effective Medical Billing Solutions, avoiding the average cost of reworking on healthcare administrative errors and inconsistencies.


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