Actual Cost of Claim Rejections
5% Rejected Claims Rate
All practices should strive to reduce their rejected claim rate to 5% or less if possible. Consider that the average practice has clean claims rate between 75% and 85%, 15% to 25% rejected claim rate is quite high. Consider that out of every 500 claims that are made, there are 125 that are rejected for one reason or another, you can see what kind of impact that it has for your revenues.
Even if most of the denied claims are finally accepted, you are still out the time, money, and effort it takes to get back lost revenue. When you consider what is required to finally get a rejected claim through, it is far more efficient to try and eliminate as many bad claims before they are rejected by the insurance company.
Why Rejected Claims Cost Your Practice
There are many billers willing to write off rejected claims as they are unable to keep up with the volume of rejections and denials. They feel it is better to focus on the 75% of claims that do pay. The problem is that the cost of the 25% that do not go through may be more than you think.
Billing becomes more expensive, especially when they cannot keep up with who has not paid their claim. The net collections slow down which again consumes more time and effort in the collection process. The good news is that there are inexpensive, effective ways to curb the rejection rate so that your practice collects more revenue.
Collecting More Revenue
– Work Rejections Quickly
– Spot Recurring Rejections and Make Adjustments
– Review All Validation Reports for Claims that have been Rejected
– Look at Software, Personnel, and Practice to Find Issues that Might be a Cause
When you put more effort into finding out why claims are rejected, you start to make discoveries about how your practice handles claims which leads to greater efficiency. At the very least, you discover patterns that can be corrected and highlight patients who need to pay before they can be seen again.
The more proactive you are in getting claims approved by verifying insurance coverage, asking patients who did not pay on their last visit to address the situation, and updating software and practices that might be contributing factors, the revenue stream increases.
By putting in effective denial management services, you can minimize the claims that come to your practice. Plus, you will make your medical billing more efficient as a result.
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