Problems Solved: 3 Issues Plaguing Healthcare Providers & Their Solutions – #1 Insurance Claim Denials

Most Common Claim Denial Codes Infographic


Healthcare providers are faced with ever-changing industry standards, regulations and restrictions. The presenters at this year’s New Jersey HFMA Annual Institute shed some light on three issues plaguing the industry under the current reforms, and offered various solutions to help providers not only to succeed, but to thrive in today’s environment.

In this three part blog series we will discuss three major issues identified at the annual institute and that plague providers across the country. But every challenge has a solution, and we will share those with you too!

Issue #1: High rate of insurance denials

Insurance coverage denial rates can vary significantly across states and insurers, but a significant percentage of insurance denials can lead to a growing backlog of aged accounts and decreased AR. Even those providers with dedicated insurance denial management teams in place are running into complications handling denials from exchange plans. Exchange plan denials are federal claims and not subject to state regulations, so back office staff is now required to understand not only state laws but also federal regulations.

Annual Institute presenters Charles Reitano of Cooper University Healthcare and Jennifer Tosto of Convergent indicated that 60 percent of claims in New Jersey are exchange plan claims and as a result the appeals process has become much more difficult. New Jersey providers’ struggles are only one example of what is occurring across the country.

Solution #1: Build a successful denial management program

Reitano and Tosto suggested the best solution is to tailor custom appeals to each denial. In order to do this, providers must have a knowledgeable and well-trained staff with extensive knowledge of the law.

They provided tips for tailoring appeals for the most common denials.

  • Wrongfully denied claims: Contact the insurance representative directly and always obtain proof of receipt of the claim as well as the appeal. If you are able, quote statutory language so the representative knows you understand the law and assure them that if your claim was lost in the “claim shuffle” that it could present a HIPAA violation.
  • Refund demands: Federal and state insurance regulations provide different deadlines for requesting refunds. Make sure the request is falls within the appropriate deadline and look at specific payer regulations (contracted vs. non-contracted vs. government). Never automatically process a refund.
  • Preauthorization denials: Keep track of all attempts to obtain preauthorization. State and federal laws set forth a time frame in which the insurance company must respond before the provider can assume authorization. If the course of care changes after receiving a preauthorization, immediately send an appeal requesting retroactive preauthorization for the new treatment.

Of course not all providers can afford to hire their own denial management team, but there are transparent business process outsourcing vendors that can help.

The next article in this series tackles an issue outside of your practice, rising self-pay AR. As patient responsibility increases so do unpaid balances and costs. Stay tuned for our solution to this ever-growing issue!

Read Article 2 of this series: Rising Self-Pay 

Read Article 3 of this series: Rising Bad Debt

Written by Ali Bechtel, Public Relations Coordinator

This information is not to be construed as legal advice. Legal advice must be tailored to the specific circumstances of each case. Although we attempt to provide up-to-date information, laws and regulations often change. We make no claims, promises, or guarantees about the accuracy or completeness of this document. For legal advice, please consult an attorney.

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