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The Cost of Claim Denials in Your RCM

Author Kristen McPherson

Dealing with claim denials is a reality for most behavioral health and human services organizations. In fact, an average of 17% of in-network claims were denied by payers in 2019 alone. These denied claims come at a cost. The time and effort required to appeal a denied claim can take up precious resources and cost your organization more. The alternative – not appealing a denied claim – can leave significant money on the table. Finding a solution is essential for organizations to achieve financial sustainability that will allow them to grow and scale operations in the future.

You’ve probably heard the old adage, the best defense is a good offense. And that principle applies to your claims process as well. The best option for organizations looking to minimize the risk and cost of claim denials is to take a proactive approach. In other words, finding ways to prevent claims from being denied in the first place.

Common Reasons Claims Get Denied

Understanding how to prevent claim denials starts with determining why claims are being denied in the first place. Some of the most common reasons include:

  • Missing, incorrect, or duplicate info
  • Incorrect codes
  • Including service or treatment not covered under plan
  • Missing deadlines

These first three reasons are all variations of claims that included errors before they were ever submitted. However, if additional time is taken to check, correct, and double-check claims ahead of submission, it can lead to the fourth issue of slower processes causing deadlines to be missed.

Leveraging Tools to Manage Your Revenue Cycle

Relying on manual processes for submitting claims and managing billing is simply not a suitable option for large and mid-sized organizations. While it may be sufficient for an individual practice or single provider, larger organizations need a better way to manage their revenue cycle. Billing software, and particularly software that’s compatible with or included in a more robust electronic health record (EHR) solution, can help streamline and accelerate the revenue cycle.

Leveraging digital tools can help behavioral health organizations take a more proactive approach to processing claims effectively. A behavioral health EHR that keeps up with the latest codes and requirements can help automatically check for common issues like missing information, incorrect codes, and other details. By automating parts of the billing cycle, your EHR can also help speed up the process, ensuring claims are clean before they’re submitted and speeding up the process to ensure deadlines don’t get missed.

Investing in an EHR for Your Organization

Finding and implementing the right EHR for your organization is a big step toward improving financial sustainability at your organization. When considering how quickly costs can add up due to inefficient billing cycles, denied claims, and the appeals process, an EHR is a well-worthwhile investment.