Research shows the 5-to-10 percent of medical claims rejected by insurance companies account for 90 percent of provider organizations’ missed revenue opportunities
Clinical laboratories cannot afford to leave money on the table in today’s healthcare environment. Yet denied claims continue to be a significant source of revenue loss for many organizations. By some estimates, the 5-to-10 percent of medical claims rejected by insurance companies1 account for 90 percent of an organization’s missed revenue opportunities.2
The impact of this lost revenue is made worse by the dramatic reductions in testing fees imposed by the Protecting Access to Medicare Act (PAMA), as well as the rise of high-deductible health plans. As patient pay responsibilities increase, so too does bad debt exposure for provider organizations. This makes it imperative that laboratories collect every dollar they’re entitled to from insurance companies.
Unfortunately, most labs lack the staff to remediate every denial, and industrywide, only about 35 percent of payer rejections are ever reworked and resubmitted.3 While some organizations triage denial resolutions to focus solely on the highest value claims, this is an imperfect solution that may do little to stem mounting write-offs.
In any case, the cost of resolving denials is significant, with an average of $25 spent per rejected claim.4 Multiply that by 100 denials a month, and remediation expense for an average healthcare organization can easily reach $30,000 annually.
The good news is that an estimated 90 percent of denials are preventable, and new tools are available to both decrease denials and more efficiently manage those that do occur.5 Change Healthcare offers a range of solutions designed to streamline denial avoidance and remediation to help laboratories focus on getting paid faster, easier, and more accurately.
Developing Mission-Critical Processes
Denials occur for a wide range of reasons. Among the most common is missing or incorrect patient information. Other triggers include code or modifier errors, lack of prior authorization, and lack of medical necessity. Resolving these problems while expediting denial re-work demands the consistent application of new capabilities and processes, including:
- Eligibility checks on every claim, including pre-authorizations and medical necessity
- Ensuring claims are correct before submission; clean claims are less likely to be rejected and more likely to be paid faster
- Streamlined workflows that reduce inefficient processes and make re-work simpler and more effective
- Secondary tools to streamline the appeals process
- Regular payer follow-up to identify processes that may need to be corrected and/or areas for staff education improvement
Clinical laboratories cannot afford to leave money on the table in today’s healthcare environment. Yet denied claims continue to be a significant source of revenue loss for many organizations.