3rd August, 2023
In an increasingly digital healthcare industry, the prevalence of claim denials due to errors in the claim submission process is a significant concern. High claim rejection rates are often attributed to a lack of understanding of the medical billing submission process and the intricacies of medical claims.
To navigate these challenges, healthcare providers must keep abreast of best practices and procedural updates. Neglecting this could result in costly and time-consuming complications that many healthcare providers cannot afford. By enhancing their understanding and management of the claim submission process, Revenue Cycle Management (RCM) teams can prevent unnecessary revenue losses.
In this article, we delve into the claim submission process – its nature, how it works, and the vital steps necessary to improve its efficiency.
What is a claim submission?
A claim is essentially a document that a healthcare provider submits to an insurance company to receive reimbursement for a medical service. It details the medical services rendered and their associated costs, making it a critical step in the medical billing process.
How does the claim submission process in medical billing work?
The claim submission process might seem complicated, but it can be broken down into four straightforward steps:
Despite adhering to the correct procedure, minute details can be overlooked, leading to errors and potential claim denials. Here are some steps to streamline the claim submission process:
1. Keep patient data updated
Medical claims are about the patient. Your claim must have all the deductibles, policy numbers, and the exact amount that the patient is liable to.
But having a manual error here is not the only possible reason for rejection. The basic demographic information about the patient needs to also be accurate in order for the claim to get approved. Information such as billing address, insurance policy data, medical information, policy number, etc. all needs to be thoroughly checked.
It then becomes the duty of the RCM staff to verify all the necessary details of the patient before they submit the claim. This avoids the chance of rejection caused by some human error.
Staff must cultivate a practice of verifying and updating patients’ details at every visit. Manually entering the information produces high chances of errors in the data entry, so employees should be trained to collect data digitally and keep that info stored securely.
If the RCM staff is entering some information on pen and paper, they need to make sure that they write it all legibly. This is one of the most common yet easily avoidable reasons for claim rejection.
2. Check for pre-authorization requirements
Claims get rejected in pre-authorization, too. But if pre-authorization is done at least 5 days before the date of service, there is a higher chance to reduce rejections.
Every insurance provider has its own guidelines and criteria. Pre-authorization helps in the reconciliation of the entire process --- saving time and money.
When pre-authorization is done proactively, the billing team can measure the effective reasons for ‘no authorization’. All the essential details like type of procedure, the procedure requiring prior authorization, and procedure alignment with the patient’s plan are all covered in this step. This step, thus, greatly impacts the cost cycle of the organization.
Claim denials have the potential to create highly negative financial impacts that are well worth avoiding.
According to a Change Healthcare analysis in 2017, rework on denied claims can cost healthcare providers roughly $118 per claim.
While the analysis shows that 63% of denied claims can be recovered, representing nearly $262 billion in revenue, it will still cost $9 billion for the healthcare providers to recover this money due to the resources needed to rework the claims.
3. Train staff specifically for claim submission processing
Train staff specifically for claim submission processing Lack of training can create needless delays in the process and denials in the claim submission.
Every healthcare organization should take time to thoroughly train its RCM employees to help expedite the process of claim submission. Managers must set rules to abide by, which must be communicated to their employees regularly.
Constant and consistent training helps with improving the claim submission process and avoid high claim denial rates.
For example, some insurers might ask to include chart notes with claims for new patients whereas some might use chart notes only to follow up. Training provides clarity with these types of rules.
This means your entire medical billing team should be trained without any exception. In this way, every employee involved in medical billing will be proficient with the guidelines of the claim submission process.
If needed, there is now automation billing software that can enhance the overall claim submission process. Staff should be well-equipped with these tools if your hospital or clinic uses them.
4. Track the reasons for claim rejections
Learning about mistakes helps us to overcome them. If claim denials are tracked regularly, you’ll get the answer to some important questions:
Is it the fault on the billing team side? Or is it because the claims rejected were not covered? Or maybe a statement was never quoted?
Tracking rejections will help in analyzing errors and optimizing performance. This in turn helps you to understand the denial code, consequently boosting efficiency of the overall process.
5. Use digital documentation
Documentation helps in encouraging better revenue cycle management.
Having accurate documentation, in particular, helps create a hassle-free experience of claim submission and reimbursement.
When proper digitized documentation is carried out, errors such as the submission of a claim twice, are avoidable.
Indeed, it's common for healthcare providers to submit delayed claims twice to the insurance company, especially when it takes a lot of time to process. But this only adds to the additional time and effort devoted to a claim that has already been under consideration.
Proper digitized documentation helps in avoiding this scenario while saving time and energy.
6. Outsource some documentation processing
Sometimes it can prove beneficial to keep an open mind towards outsourcing, especially when it comes to increasing the bottom line.
According to a Black Book Market report, hospitals that choose to outsource clinical documentation functions have realized at least $1.5 million more in healthcare revenue and claim reimbursement compared to hospitals that kept documentation processing in house.
In general, outsourcing helps regulate the revenue cycle and improves cost-effectiveness. Moreover, a good third party can also provide the opportunity to leave challenging jobs in the hands of the experts.
This gives some time to free up your staff and reconsider if some improvements are to be made at your end. When you have outsourced, your staff can clear up backlogs and learn more specific tasks by attending training programs.
7. Keep a log and run quality checks
According to Karen Wilson, Director of Odyssey Recruitment, a global medical recruitment agency for doctors and medical staff, insurance companies take an average of three to six months to pay out medical claims in the UAE.
With such a long period needed to square off claims, any rejections at the last minute due to misplaced documents or incorrect details can impair healthcare services significantly. This adds additional pressure on operational expenses and can lead to poor medical services.
If the quality of any parts of the procedure is compromised, it will also lead to errors and consequently denials of claims.
However, relying on digital technology can help overcome these errors. This is an enhanced way to keep up the accounting practices to record and post payments and keep a watch on cash flow.
One of the ways to maintain the quality check is by keeping a log. The log should contain all the information about a patient and can be used by the billing team for faster processing of data. This will then serve as a digitized form of all the patient’s information and can be used handily.
If all of the above points for managing the claim submission process are considered, a report by Change Healthcare shows that 86% of the claim denials can be prevented.
But this can only be achieved when healthcare providers step up their game by putting in more effort to avoid the rejected claims.
The implementation of the practices mentioned above can lead to a clean claim submission process, significantly impacting revenue growth for your healthcare organization.