As the saying goes, it is always much easier to do things right the first time. Claim denials, among our clients, cost 3-5 times of efforts/time to fix, to the extent that it significantly increases the AR risk. Therefore, reducing claims denial rates warrants close attention for any revenue management process. As denial of claims is impacted by a series of variables from payer, procedure cap to provider documentations, the complexity of the combinations might paralyze any efforts to contain it. To balance it, one can focus on key performance indicators (KPIs) in a Dashboard, which identify the changes of these important metrics. We will discuss the top KPIs for each stage of the billing process through a blog series.

Here are to 3 KPIs to closely monitor to slash Claim Denials in a practice:

1. Claims Denial Rate

This KPI measures the percentage of claims denied by payers over a specified period. A high denial rate signals revenue leakage and inefficiencies in the revenue cycle. An effective dashboard should offer:

• Drill-Down Capabilities: Analyze denial reasons such as coding errors, missing documentation, and patient ineligibility, along with categories like registration and authorization.
• Comparative Analysis: Compare denial rates across different locations, providers, and payers to identify problem areas.
• Trend Monitoring: Track denial rates over time to evaluate the effectiveness of improvement efforts.

2. Clean Claims Rate

The clean claims rate represents the percentage of claims accepted on the first submission without errors or missing information. A high clean claims rate minimizes denials and reduces rework. A robust dashboard should help practices:

• Error Identification: Detect common errors leading to claim rejections.
• Process Improvement: Implement training and procedural changes to increase the rate of clean claim submissions.
• Impact Monitoring: Assess how corrective actions influence the clean claims rate.

3. Days in Accounts Receivable (AR)

Days in AR measures the average time it takes to collect payments, reflecting the efficiency of the revenue cycle. Prolonged days in AR can indicate issues with claim denials or payment delays. An effective dashboard should provide granular insights into:

• Granular Insights: Break down days in AR by payer to facilitate timely follow-ups on delayed payments.
• Detailed Breakdown: Analyze days in AR by provider or service line to uncover potential coding or billing issues.
• Trend Analysis: Evaluate trends over time to understand the impact of denial reduction efforts on cash flow.

By prioritizing these KPIs and leveraging a dashboard that provides detailed analysis, comparison capabilities, and trend tracking, healthcare practices can proactively identify and address revenue leaks (through drill down analysis), (propose new measures guidance to) streamline billing processes, and ultimately reduce claim denials, leading to better revenue management outcomes.

Visibility provided by the changes in these KPIs is the first step for any chance of improving it. Read more here.  If you are interested in finding out how to set up such as dashboard for your practice, you can visit our contact page or simply send us an email at: contact@solutions4billing.com for a no-obligation consultation.