5% rejected application rate
All practices should strive to reduce their application denial rate to 5% or less whenever possible. Consider that the average practice has a clean claim ratio of between 75% and 85%, 15% to 25% of the rejected claim ratio is quite high. Consider that out of 500 applications, 125 are rejected for one reason or another. You can see the impact this has on your earnings.
Even if most of the denied claims are eventually accepted, you still lack the time, money, and effort to recover lost earnings. When you consider what it takes to finally get through a denied claim, it’s far more efficient to try and fix so many bad claims before they get denied by the insurance company.
Why denied applications are costing your practice
There are many billers willing to write off rejected claims as they cannot keep up with the volume of rejections and denials. They think it’s better to focus on the 75% of claims that actually get paid. The problem is that the cost of the 25% that doesn’t go through can be more than you think.
Settlement becomes more expensive, especially when they can’t keep up with who hasn’t paid their claim. Net collections slow down, which in turn consumes more time and effort in the collection process. The good news is that there are inexpensive and effective ways to curb the rejection rate so your practice can generate more revenue.
Collect more revenue
– Process rejections quickly
– Recognize recurring rejections and make adjustments
– Review all validation reports for rejected claims
– Look at software, staff and practice to find problems that could be a cause
As you put more effort into understanding why claims are being denied, you begin to gain insights into how your practice handles claims, leading to greater efficiency. At the very least, you’re discovering patterns that can be corrected and highlighting patients who need to pay before they can be seen again.
The more proactive you are in approving claims by reviewing insurance coverage, prompting patients who didn’t pay on their last visit to rectify the situation, and updating software and practices that may help, increases the revenue stream.
By implementing effective denial management services, you can minimize the claims being made about your practice. It also makes your medical billing more efficient.
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