Denials can be a significant barrier to collecting what your practice is owed. Proper denial management is key to boosting recovery rates and improving cash flow.
Key metrics to focus on
Denial rate
Payers with high denial rates can slow down the process of getting paid and impact your business agility. The industry benchmark for denial rate is less than 5%, with the average being 10.8%.
Denial recovery rate
While industry standards suggest a 85% recovery rate on denials, many practices fall below this level. Improving this rate through diligent, timely follow-up can lead to faster collections.
Clean claim rate
A high clean claim rate is essential for minimizing denials from the start. Submitting error-free claims on the first try reduces the need for rework, speeds up the payment process, and improves overall efficiency. Practices with a high clean claim rate experience fewer delays due to denials, leading to smoother cash flow. Industry standards suggest a clean claim rate of 90% or better.
Actionable steps
Identify common denial reasons: View and filter denials by category and by adjustment code to understand why claims are being denied. By understanding these root causes, you can modify your patient intake and billing processes to proactively prevent claims from being denied.
Automate denial management: Automate workflows and follow-ups on denials to ensure no claims slip through the cracks. Some systems allow you to set workflows for specific denial reasons.
Target high dollar denials: Prioritize claims with higher outstanding dollar amounts that have been denied in order to recover larger portions of revenue faster.
Tip: Use a denials management tool that allows you to categorize and prioritize denials, so you can focus on the biggest issues first.