How Effective Denial Management Increased Revenue by $5 Million
Background
This case study explores how RCM Matter teamed up with a group of 47 mental health practices in Phoenix, to significantly reduce their claim denial rate and generate millions of dollars in newfound revenue.Challenges Faced by the Mental Health provider group
They experiencing a growing issue with claim denials, impacting their financial sustainability. Over the past year, their denial rate had reached 78%, resulting in a loss of millions of dollars annually. This financial burden was further exacerbated by the time and resources necessary to appeal denied claims, which often proved unsuccessful.
High rates of claim denials, up to 78%, pose a significant challenge for mental health providers, leading to substantial revenue loss and administrative burdens. Appeals further complicate matters, with uncertain success rates. This cycle strains financial health and resources. Solutions entail refining billing practices, meticulous documentation, and navigating appeals efficiently. Advocating for policy reforms can streamline reimbursement and reinforce mental health parity laws, easing the burden on providers.
"We were losing significant revenue, and appealing these denials was a resource-intensive process that often yielded limited results."
stated by administrator.
RCM Matter’s Solution
RCM Matter implemented a comprehensive denial management program for Mental Health Nurse Practitioners to tackle their challenges head-on. The program consisted of several key components:
- Root Cause Analysis: RCM Matter’s team conducted a thorough analysis of a representative sample of denied claims to identify the primary reasons for denial. This analysis revealed that [percentage] of denials were attributed to coding errors, stemming from inaccurate medical coding, often due to the complexity of coding guidelines and frequent updates.
- Incomplete documentation: 43% of denials stemmed from missing or incomplete medical records, hindering the payer’s ability to assess the medical necessity of the services provided.
- Payer discrepancies: 35% of denials arose from disagreements with the insurance company regarding medical necessity, coding interpretations, or contractual obligations.
- Proactive Measures: We implemented regular audits of their coding practices to ensure adherence to the latest coding guidelines and regulations. This involved reviewing a sample of charts and identifying potential coding errors before claim submission.
- Thorough Documentation Reviews: Our team collaborated with their clinical staff to improve the quality and completeness of medical documentation. This included standardizing documentation templates, ensuring proper coding of diagnoses and procedures, and ensuring all necessary information was included in the claim submission.
- Payer Contract Reviews: We meticulously reviewed their contracts with various insurance providers to identify potential discrepancies or areas of clarification regarding service coverage and coding requirements. This proactive approach helped minimize potential misunderstandings and disputes with payers.
- Effective Appeals Process: We established a streamlined process for appealing denied claims. Dedicated specialists with extensive knowledge of medical coding, reimbursement regulations, and payer policies reviewed each denial and developed targeted appeals strategies. This included gathering additional supporting documentation, clarifying coding interpretations, and negotiating with payers on their behalf.
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Results
The implementation of RCM Matter’s denial management program yielded significant positive outcomes for our client:
- More Money: The clinic made 78% more money compared to before the program.
- Less Denials: The rate of denials went down by 58%, which means they didn’t lose as much money.
- Easier Process: It became easier to do the billing, so they could do it faster and with less work.