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The healthcare revenue cycle is fraught with various moving parts and pieces that can throw a wrench in your financial performance; one such example is that of rejected claims, which can delay your payment for services rendered, cause extra stress, and result in lower financial performance for your holistic practice.
The ideal metric for tracking the performance of your claims processing strategy is to have a 95% or higher clean claims rate—in other words, you want to aim for at least 95% of your claims to be processed without issue. These clean claims demonstrate that your medical coding and medical billing approach is effective and efficient. Reworking rejected claims costs your practice time and money, plus it causes unnecessary headaches.
While a 95% clean claims rate is ideal, the reality is that practices average 75-85% clean claims, which means that up to a quarter of revenue is being held up by rejected claims. If your holistic practice accepts insurance or patients covered by Medicare, then this can significantly stymie your healthcare revenue cycle.
Hence minimizing rejected claims is a priority; in this article, we’ll dive into how rejected claims help your practice, hinder your practice, and some best practices for the medical billing and coding process.
How Rejected Claims Help Your Practice
It might sound counterintuitive, but if you shift your perspective to see rejected claims as something that can help your holistic practice, then you’re already on the right track.
Rejected claims can present an important opportunity for your holistic practice’s overall revenue cycle in terms of revealing the points of improvement in your medical coding and billing process.
Rejected claims were, more often than not, rejected for important reasons—maybe the claim wasn’t completely filled out, perhaps the codes were inaccurate or didn’t fully illustrate the services rendered, or something else happened.
Gather your rejected claims over the last 6 months or so and evaluate the frequency of claims being rejected, the reasons for the rejection, and the average time it took to correct and resubmit the claims. Armed with this information, you’ll notice where the points of improvement exist within your medical billing process.
Maybe you need to update the list of frequently-used medical billing codes that you reference when filling out your claims or perhaps one important part of the claim is constantly left blank by accident. Whatever the case, taking the time to see why the rejected claims are happening can empower you and your holistic practice to refine your internal medical billing and medical coding process.
Since insurance or CMS claims can be a significant portion of your holistic practice’s overall healthcare revenue cycle, rejected claims can reveal where your financial performance needs more attention or education.
How Rejected Claims Hurt Your Practice
Of course, on the other hand, if you can avoid dealing with rejected claims then you should absolutely do so! These types of claims cost your holistic practice time and money and negatively impact your revenue cycle.
By having to spend more time reworking a claim, you’re unable to focus on more strategic initiatives like your marketing presence or attend to patient feedback. Plus, this time spent costs money; whether it’s the time you spend on the clock or paying for a team member to tackle the rejected claims issues, reworking claims can be costly.
If the average cost for filing a claim is $6.50, the average cost of a reworked claim is $25. This might not be too bad to deal with when only one or two claims need to be reworked, but if your holistic practice is dealing with dozens of rejected claims, then this amount can quickly add up!
For example, if you have 100 rejected claims in one month, you’ll have to spend an additional $2,500 per month. Now, think about it from an annual standpoint—that’s a whopping $30,000 each year. Plus, rejected claims result in delayed reimbursement, which slows down your practice’s revenue cycle and skews your financial performance metrics.
4 Steps to Minimize Rejected Claims
So what are some steps you can take to minimize the amount of rejected claims your holistic practice has to deal with? Check out these tips:
Verify Patient Eligibility Prior to the Date of Service
Established patients are great for your practice, but make sure you don’t assume their insurance coverage hasn’t changed over time. Simply asking them at every visit if their coverage has changed or if they have any patient information updates can save you and your practice time later down the line. Outdated patient information is a tremendous source of rejected claims, so take the extra minute ahead of time to confirm your patient’s information before proceeding with the claim.
Double-Check Medical Coding Modifiers
The world of medical coding and medical billing is complex and intimidating; one crucial step in the medical coding process is to verify that you’re utilizing the correct medical coding modifiers. These modifiers might seem too small to matter, but your claim can be rejected if not appropriately coded!
File Your Claims In a Timely Manner
Insurance companies and CMS typically require you to submit claims within a tight window of time, and missing that window can increase your chances of a rejected claim. Be sure to pay attention to claim filing deadlines and keep in contact with the pertinent insurance company if you encounter issues or have questions. Resolving any issues before filing a claim—while staying within the timeline—can help ensure your claim goes through without any troubles.
Outsource Your Medical Billing Altogether
If you find yourself and your team members swamped with rejected claims and simply wish you could make that part of your holistic practice disappear, then it’s time to consider partnering with a medical billing firm!
Outsourcing your medical coding and medical billing process to a trusted partner can immediately boost your revenue cycle and keep your holistic practice’s finances running smoothly. Plus, with the medical billing partner, you won’t have to worry about keeping up with esoteric legislation that impacts the billing process or stress about reworking claims since they’ll be handled correctly from the beginning.
Consider partnering with Holistic Billing Services to comprehensively manage your medical billing process so that you can focus on what matters most: your patients. Our experts have experience in your specialty, and we’re eager to help your holistic practice thrive!
