By: Dyana Williams, Client Engagement Manager

Understanding and addressing claim denial reasons is crucial for the financial stability of medical and pathology laboratories. As part of a recent case study, our RCM Solutions Team delved into the denial patterns of two of our large clients within the same state to shed light on the impact of front-end editing systems.

• READ MORE RCM CASE STUDIES:
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  • Examining Common Reasons for Drug Screening Denials
  • Steps for Mitigating Timely Filing Denials on Laboratory Claims
  • Incorrect Modifier Usage Ties Up $200K in Lab Reimbursements
  • The Significance of Medical Necessity and CO-50 Denials
  • Using Billing Data to Compare Commercial Lab Reimbursements

 

Comparing Billing Capabilities and Advantages of Front-End Edits

Location 1 boasts a robust front-end editing system, aiming to enhance the chances of submitting first-pass clean claims. The top denial reasons for this client include claims requiring additional information, timely filing, and non-covered services. Notably, these types of denials are typical across all laboratories and are commonly attributed to various reasons worthy of additional exploration.

Conversely, Location 2 lacks the same sophistication in its front-end processes. Denial reasons for this laboratory reveal a prevalence of issues such as bundled services and missing qualifying procedures. This stark contrast emphasizes the significance of an advanced front-end editing system in reducing denials and maintaining a strong cashflow.

The value of robust front-end edits is evident in Location 1’s ability to significantly reduce denials related to the billing of multiple related procedure codes for a single date of service, showcasing the effectiveness of proactive measures. In contrast, Location 2 faces higher denial rates for those types of services, suggesting that investing in front-end editing systems could streamline processes and enhance claim acceptance rates.

In conclusion, this case study underscores the pivotal role of front-end edits in reducing denial rates and improving overall billing efficiency. As healthcare facilities strive for financial optimization, investing in advanced front-end systems emerges as a strategic imperative to navigate the complexities of medical billing successfully.

 

Case Study Analysis

Top denial reasons x 3 months, with overall percentage of the Top 5 denial reasons.

Location 1

Total Denials: 4,409

1. 37% … Addt’l info needed to process claim
2. 30% … Timely filing denials
3. 12% … Non-covered service
4. 12% … Previously paid
5. 9% … Place of Service Code

 

Location 2

Total Denials:  4,850

1. 32% … Addt’l info needed to process claim
2. 22% … Timely filing denials
3. 21% … Bundled services
4. 14% … Missing qualifying procedure
5. 12% … Exact duplicate claim

 

Takeaways

Our in-depth analysis of the denial patterns of two laboratories within the same state highlights the critical importance of understanding claim denial reasons and being able to effectively adapt your billing practices in real time. The contrast between Location 1 and Location 2, with one boasting a robust front-end editing system and the other lacking the same sophistication, underscores the direct impact having these systems in place can have to improve your financial stability.

If you’re seeking to improve your front-end processes while cutting down on denials, or if you’re simply trying to determine your pain points while improving overall collections, contact our RCM team today for a free consultation. Our targeted audits specialize in uncovering the errors and inefficiencies impacting your revenue.

 

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