How to Effectively Address SNF Claim Denials
Posted: Apr 14, 2022
Each year, studies and surveys show that there is a growing problem with claims denial rates. Like most healthcare organizations, Skilled Nursing Facilities (SNFs) report increasing rates of claims denials. Some report that upward of 15-20% of all their claims are denied.
Even SNFs who have detailed plans in place to avoid insurance payment pitfalls find themselves facing growing numbers of denials. Many SNFs have reported that addressing claims denials has become a large part of their staff’s regular work. Or, that they are so far behind in denials management that it is leading to increases in lost or delayed revenue.
Handling denied insurance claims can be frustrating, time-consuming, and complicated. But, it’s more important than ever before to ensure that your team has a proactive denial management and prevention strategy in place.
SNF Denials Management Best Practices
Claims denial rates can range anywhere from .5-3% from most major private payers. Not to mention the average denial rate for Medicare hovers between 8-10%. Those denial rates represent a significant strain on the financial health of your organization.
At the end of the day, you want to improve your collection rates and help boost your organization’s revenue. But how?
Effective denial management.
With effective denial management, it’s possible to improve your processes and maximize your revenue potential. We’ve compiled six denial management best practices to help your SNF improve collections rates and increase revenue.
Identify the Source of Your Errors
Get to know your denials. Before you can make any changes you must identify where the errors are occurring. Begin by tracking denials by volume, type, payer, and reason. This information will help you identify the source of the denial.
Continuous monitoring of denials will help you identify the source of the errors. Once the source is identified you’ll be able to determine the appropriate action steps needed to prevent future denials.
Identify the Reason for the Denial
You’ve identified the source of your denials, now it’s time to understand the reason. When a payer denies a claim they use a specific claim adjustment reason code (CARC). These codes help you prepare the actions you need to take to resolve the denial.
For example, a payer may deny a claim with a CARC of CO-4. This tells you that the procedure code used is inconsistent with the modifier or a required modifier is missing. In this example, you would need to resubmit the claim with the appropriate modifier for the procedure.
It’s important to stay on top of denial codes and insurer communication. This will help you identify the reason for denial and take appropriate actions to resolve them. You can find a list of adjustment reason codes here.
Understand Filing Limits
Most payers have specific time limits for claims to be resubmitted. It is important to keep these filing limits in mind while resolving issues. The filing limits can help you prioritize your work. Focusing on accounts based on the shortest filing limit.
Document Your Updates
Document what you did. Your future self will appreciate the notes!
When you call an insurance company or work on a denied claim, keep a record of the information. For example, record the name of the person you spoke with, why the claim was partially paid or denied, and any actions you took to follow up. Also, note the outcome of the communication or updates.
All these details can help prevent similar denials in the next billing cycle. Or help with future appeals.
Develop a Standard Approach for Resolution
Having a standard approach in place can make working on your denials more manageable. Try creating a structured, organized process that your team can follow for each type of denial.
For example, identify any coding-related denials and route them directly to your medical coders to manage. Or, break down your denials based on the payers with the shortest filing limits first.
A standard approach for resolving denials gives your team the ability to handle denials properly and quickly.
Be Intentional With Your Time
You and your staff have a limited amount of time. When organizing your process for managing claim denials, be intentional with how you will use that time. Working down the list of denials may take more time and effort than batching your work.
Try batching similar denials so that you can streamline your efforts. From our previous example, if you have several claims with a CARC of CO-4 group them together. Then work on adjusting or adding an appropriate modifier to all the claims in one batch.
Investing in Technology and Analytics
No matter how perfect your processes are, technology can help you improve the efficiency and transparency of your denial management process.
REVEX is a platform designed to help SNFs streamline their AR tracking and denials management processes. The software provides automation capabilities that help you capture notes and statuses in real-time. For managing denials, REVEX can:
- Help the billers organize the claims
- Maintain shareable and standardized notes to help the billers save time documenting denial reasons, actions steps, and more.
- Allow an individual biller to mega-batch their workflow.
- Alert you for claims that need immediate attention.
Learn more about how REVEX can improve your cash flow, efficiency, and transparency.
Get Expert Assistance
These claims denial best practices will help get you on the right path. But, there’s much more to this challenging process. Payers use complex and varying requirements in contracts and their rules are constantly changing. Also, payers are putting technology to use in identifying inaccuracies in claims. Making it all the more difficult for SNFs to submit accurate claims. This is where an experienced SNF medical billing company can help!
MCA is a market leader for skilled nursing billing services. As a full-service Revenue Cycle Management company, we provide electronic claims submission to Medicare, Medicaid, and all commercial insurers.
When you choose MCA as your revenue cycle management service we handle every aspect of your claims, billing, and collections process. We submit clean, compliant claims and follow up on slow or underpayments.
MCA is here to help skilled nursing facilities advance their revenue cycle management. Contact us to learn about how MCA can help you effectively manage your SNF claims denials.