How to manage denials after ICD-10 implementation

Carl Natale
by Carl Natale

Medical practices can expect an increase in medical claim denials after Oct. 1, 2015. But that doesn't have to mean that revenue will be lost.

The Centers for Medicare and Medicaid Services (CMS) predicts denials could increase from 100 percent to 200 percent and lengthen accounts receivable cycles an extra 40 percent.

The easy answer is to stockpile savings or get a line of credit so medical practices can last a couple months without reimbursements. Who can afford that?

This is going to require attention and investment.

Managing claim denials after Oct. 1 will require more than a response from a medical coders — especially if the denials could call into question medical necessity. Then physicians will need to spend time justifying the reimbursements. This is going to be the kind of query that bogs down productivity more than documenting the encounter will.

Healthcare providers will need a denials manager who can track denials and communicate with healthcare payers. This is where early communication with payers becomes an investment. If staff have a contact person now, it's more likely they can reach someone who can deal with denials after Oct. 1.

Denials managers need to be able to grasp the medical billing process and medical concepts. They need to understand why claims are denied so they can help correct deficiencies in clinical documentation or medical coding accuracy.

End-to-end testing will be vital. It's a chance to identify problems and solve them before they hinder reimbursements. Testing will reduce surprises after Oct. 1.

There also needs to be an effort to look for trends in denials. Trends can help  healthcare providers understand how to submit medical claims properly.

This is also why it's a good time to track denials and rejections.

You need to know if there's a problem first so track:

  • Days in accounts receivable by healthcare payer
  • Denial rates
  • Amount of reimbursements denied
  • If reimbursements match the contracted rates

As with productivity, you need to know what's "normal." That means now. Otherwise if you wait for Oct. 1, 2014, you won't know if the numbers reveal problems or business as usual. Bradley also suggests crunching these numbers weekly to keep small problems from becoming big ones at the end of the month.

And who knows. Maybe tracking these metrics will reveal problems unrelated to ICD-10 coding that you can solve sooner than later.

ICD-10 denial management starts now. Medical practices need to understand what triggers denials now and what could cause problems with ICD-10 claims. This will help prevent crippling reimbursement delays.