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Denials management 101. We’ve done some podcasts about more advanced levels, denial codes and whether they match descriptions and other more complex aspects of denials management. But we haven’t spent much time on sort of the essential denials management.

What should you use?

First, you probably can’t use your practice management system to do this because of most practice management systems. For instance, whether they’re part of an EMR or separate standalone practice management systems, they will not be able to analyze denials in the way you need to be successful. Of course, you can buy a complex and expensive denials management system and interface your system to that system, but it’s pretty costly.

Those kinds of things run significant dollar amounts such that even hospitals and practices tend not to buy them because they’re too much for an individual practice unless you have one centralized system across many, many different. We’ve seen most systems not being willing to shell out that kind of money for the practice even then. They may do it for the hospital, but frequently not for their attached practices.

Stick to denials management basics

If you want to do this, the basic steps are to export the data. That means, of course, find the reports that include the denials information within them. That means a denial code, description, and more. If that information is not available in your practice management system in a report, you should be able to get some of that information from the clearinghouse. In a worst-case scenario, it may be in ANSI X12 format, so those will be ERAs.

If you’ve got paper EOBs coming in or something out of image files, then, of course, you need to get that information, but you’re going to have to extract it or manually enter it. Some of the stuff can get kind of complex. Assuming you can get access to the data, then you can export the data, you can pivot the data, and you’re going to have to do a few other steps.

In one of the most critical functions we call denials routing, you’re going to want to group all of your denial codes into categories. You may have some challenges. We’ve talked about some in the podcasts, like some of the codes may not match the descriptions, or you may have multiple codes like CO119 versus CO-119. When you pivot, it will think those are distinct or different, and you’re going to want to update those to get them all into one category or one code so that it doesn’t break them out into different codes because you’ll lose much information that way.

Work with the right tools

You should be able to work around most of this in Excel and get most of that information. Again, you’re not going to get 100% because you effectively have to build software, like we’ve made, to handle all those exceptions, but it should work for the overwhelming majority of your denials. That’ll get you pretty good steps down the road.

Denials routing is one of the most important and sort of first things to do in denials management. Essentially, you’re taking those denials and then routing them to the appropriate departments in your organization. So you can set rules that automatically write off claims under certain conditions or automatically transfer the balance to the patient, to partial credit, or write off some portion and then transfer an amount to the patient. You can have it set so that somebody should investigate that claim to get more information, or somebody should resubmit it or appeal it or update patient demographics.

Route denials to the intended departments

Depending upon what all those individual needs are, you then route them to the appropriate department like coding or appeals, or patient registration, or payment posting, and more. The benefits of doing this are, it makes it so much easier. It saves so much time for billers and collectors.

Again, it depends on if your department is structured. Some have billers that do everything soup to nuts regarding patient registration to calling patients and doing appeals. Others have specific departments and even sub-departments who then might have collector 1, collector level 2. Some of them do appeals and or other similar requests. The more specialized you are, the more you can route these to individual departments or individual people.

Even if you don’t have all of that, even if you have a group of billers all working on the same things, having a list of, “These are the ones that I need to write off. These are the ones that I need to check coding on,” we’ve seen that save enormous amounts of time for billers. Saving time means that they work more claims, so there’s an increased collection. Even if you don’t cut staff, you collect more money.

Start collecting

On the other hand, if you have a large volume of collectors there, you could see some cost savings if you have some productivity benefits. However, that’s not the primary goal. The primary goal is to be able to get more done to collect more money.

One of the other benefits that we’ve seen that’s been surprising, I think, to the owners of billing companies and large practices is that there have been fewer questions coming from the billers and collectors about denials and what to do with certain things. That has meant less drag on management resources from denials. So up into top management, high-level managers, and things like that have seen extraordinary benefits to them, not just their employees. So it’s saved up the hierarchy time, and that has real financial benefits.

Key takeaway

In denials management 101, I’d say the first thing to implement is a denials routing process, based on codes and descriptions and get those to the proper departments and tell them precisely what to do and give them those listings, “With these, you do this. With these, you do this.” And you’ll see some huge benefits in terms of productivity and collections.