Providers submit millions of claims to payers every day. Most are adjudicated promptly and for the full contracted amount, but a fraction of these claims are denied. However, the American Medical Association (AMA) reports that between 1.38 percent and 5.07 percent of claims are denied by payers on first submission. This means that even a small practice will likely deal with hundreds if not thousands of denials each year. In addition to outright denials, in many instances the claim may be paid, but specific services are denied or payment is reduced. In either case, the impact on a provider’s reimbursement is significant.
So here are some of the top challenges providers face.
- The black hole. I wonder where my claim went.
You provided the service, coded the claim, and submitted it…and then nothing. You wait and wait, but you still don’t know what happened to the claim. So what do you do? You look online, call, fax, resubmit, or drop to paper. But you still don’t know what’s going on, and you still haven’t gotten paid.
- The denial management challenge. You’re Fired.
When you receive the claim denial, at least you know what’s going on. It’s better than the black hole, but not by much. So now you start the process of figuring out what’s wrong. You make a few changes? Those didn’t work. Submit the medical records? Not what they were looking for. And so on.
- Rules vary payer to payer. You say tomato, I say tomato.
Providers deal with multiple payers and each has its own set of rules, often for the same medical service. It’s the same procedure from the provider’s perspective, but the claim for each payer may have different limits, relational factors, or require different documentation. The rules may be written down somewhere, but they’re not easy to find.
- Rules change frequently and with minimal notification. Oh, you missed that bulletin?
Payers often change their requirements, and the government regularly issues new rules and regulations for medical claims. This makes it difficult to keep up. A claim that would have been considered correct a couple months ago, may now be denied based on information covered in bulletin”885AB///060916.” If you don’t remember that update, you better find it if you hope to get paid.
- Payer feedback is cryptic. No don’t tell me; let me guess.
When adjudicated claims are returned unpaid, the payer indicates the reason for denial, but that code isn’t always easy to decipher. Or it lacks critical information. For example, the payer lists “claim/service lacks information which is needed for adjudication” as the reason code for denial, but it doesn’t indicate what information is lacking. All you need is a magic decoder ring, and getting paid will be a breeze.
A potential solution
Many of the challenges above can be addressed by improving communication between providers and payers. Availity’s Advanced Claim Editor (ACE) does this by checking claims before they are submitted to the payer’s adjudication system, allowing any issues to be resolved quickly and with less manual intervention.
In our next blog post, we’ll focus on the main pain points for payers when it comes to claims.