Reducing the Expenses of Claim Denial Management Through Automation


Claim denials hit medical practices where it hurts. Several studies estimate the claim failure rate to be near 20 percent. With about one in five healthcare claims failing to go through, providers are forced to slog through the denial management process to ensure they’re getting paid for their services rendered.

The cost of these denials can really add up, through both lost payments and administrative expenses. According to a 2014 MGMA Connection article, the cost of reworking a claim is about $25. Here’s a challenge that might really drive this point home: Sit down with your team and your paperwork, and estimate the net loss from unresolved denials in any given month -- then factor in the administrative expense to combat denials. Is that an acceptable loss for your practice?


Denied claims are sometimes tough to interpret and often require a significant amount of work to fix. Administrative costs are vast, and dealing with the claims denials process can be frustrating for someone who lacks the expertise to recognize and resolve the issues with each claim.

One of the leading causes of denials is patient eligibility denials. Practices don’t always have the resources to manually verify insurance coverage prior to an appointment -- and in turn struggle to collect when coverage lapses or patients face unexpected bills without coverage.

Though denials are frustrating for providers, editing claims and following up with payers is an integral process for any successful healthcare organization. The question becomes: How can we manage the denial management process in the most efficient and cost-effective way possible?

The best path to success in claims denials management is through developing an effective, automated claims denial management process. And the cheapest way to manage denials is to avoid denials through automatic pre-verification of eligibility before patients receive service.

As Ardis Dee Hoven, MD, president of the AMA, told Medical Economics in 2014, “We must move toward an automated approach for processing medical claims that will save precious healthcare dollars and free physicians from needless administrative tasks that take time away from patient care.”

In the case of eligibility denials, practices are best served to use automated methods to estimate insurance coverage with each patient. Electronic eligibility verification can not only ensure that a patient is covered - it empowers patients with an up-front cost estimate, with transparency that increases patient satisfaction and the likelihood a bill is paid. Through automation, eligibility denials are reduced or eliminated.


For the denials you still have, automating the process can improve results for both practices and ambulatory centers. Practices that have implemented automatic claims processes like the University of Pittsburgh Medical Center have shown significant reductions in denials while increasing revenue per Full Time Employee.

Whether the payer is an insurance company or a private payer, automating from the outset gives providers the ability to collect without the extra hassle and cost of following up. Simply, that transparency up front pays off - and as a result, turnaround times are often quicker as well.

Setting up claims denial and eligibility automation is quite the undertaking - you might not be sure what should be done when, or how to make it happen automatically. If you don’t have the expertise necessary to automate the claims denial process, consider using a third party that has experience reducing and managing denials, and collecting more revenue for clients. At HealthiPASS, we offer low-risk plans that only charge you when you’re actually collecting - taking a small cut of the payment you may have missed out on without claims automation.

In today’s medical landscape, being able to convert bills into payments is essential in order for physician office practices and providers of ambulatory care to thrive. Through the rapid advancement of claims denial automaton, preventing or amending denials and collecting on more bills can be less of a chore than ever before.

Medical Economics
Recondo Technology