Denial management and prevention remains a critical area of focus in healthcare revenue cycle management (RCM) for healthcare organizations and payers alike. Denial management is expensive, and if it is not avoided initially, it involves costly rework. As technology advances and payer behaviors shift, healthcare organizations must adapt to new challenges to ensure efficient claims processing and revenue protection.
The Rise of AI and Automation in Denial Management
In addition to robotic process automation (RPA), a trend in denial management is the increasing use of artificial intelligence (AI). Payers have embraced these technologies to streamline claims adjudication, reduce human intervention, and handle larger claim volumes. Leveraging AI can help healthcare organizations automate denial remediation processes to save time and reduce costs.
AI-powered tools can now identify missing information in patient accounting systems, such as authorization numbers, and automatically update claims to prevent denials. This eliminates the need for manual intervention. AI can also be used to analyze denial trends, manage claims in bulk, and resolve large quantities of denials more efficiently.
The Increasing Complexity of Clinical Denials
Clinical denials have become more intricate, requiring specialized expertise. Hospitals and health systems are increasingly involving physicians and clinicians in resolving these denials, recognizing the need for clinical insight to navigate complex cases. This shift underscores the importance of collaboration across departments, from patient financial services to clinical teams, in addressing root causes and preventing future denials.
Improved Root Cause Analysis and Denial Avoidance
Healthcare organizations are adopting a cross-departmental approach in understanding the root causes of denials and implementing proactive denial avoidance programs. Involving patient health information management, financial services, and clinical departments can help identify trends and address issues. Regular reporting and analysis help organizations pinpoint areas for improvement and develop strategies to prevent denials before they occur.
Key performance indicators (KPIs) have also become central to measuring and managing denials. Leveraging analytics tools and automation to monitor performance and drive improvements can help reach the goal of keeping denials below 3% of net revenue.
Balancing Resources Between High-Dollar and Low-Dollar Denials
Historically, hospitals and health systems focused on high-dollar denials due to the cost of manual claims processing. However, automation has shifted this dynamic, enabling healthcare organizations to address low-dollar denials efficiently and cost-effectively. By outsourcing low-dollar claims to vendors equipped with advanced automation tools, providers can process these claims in bulk, reducing costs and freeing up resources to focus on more complex cases. Segmentation has emerged as a best practice, with specialized teams addressing different types of denials based on their nature and complexity. This targeted approach ensures that resources are allocated effectively, maximizing efficiency and outcomes.
The Future of Denial Management
Greater automation, enhanced analytics, and deeper collaboration between healthcare organizations and payers can help create a more efficient, cost-effective, and patient-centered approach to denial management. AI and RPA will continue to play an increasingly central role in streamlining processes, reducing costs, and improving accuracy. Hospitals and healthcare organizations will continue to refine their strategies for denial avoidance, leveraging data-driven insights and embracing innovation.
Watch this video, and contact us to learn more about how to enhance your denial management processes and drive better revenue outcomes with innovative solutions tailored to your needs.
Debra Stall, CRCR
