Healthcare Business Insights, Part of Decision Resources Group, is a community of more than 1,900 hospitals across 50 states. HBI provides research, learning, analytics, and custom services to its members in the areas of revenue cycle, supply chain, quality, and information technology.
One source of our data is our Revenue Cycle Scorecard, which is a benchmarking product that compiles data reported by HBI members on a monthly, quarterly, and annual basis. (HBI members can click here to access the Scorecard.) The Scorecard enables our community to gain insight into the national average and top quartile of revenue cycle KPIs, as well as create custom KPIs and analyze performance by geographic region. Through the year, HBI publishes reports based on Scorecard data, as described in an earlier blog post here.
But that’s not all! In addition to the Scorecard, HBI has a proprietary set of Real-World Data that includes over 26 billion medical and pharmaceutical claims, and remittances for more than 300 million patients covering 600,000 sites of care. This dataset enables the HBI team to provide our members with insight into patterns across physician referrals, payer reimbursements, disease management, and market share to drive actionable results.
This Real-World Data is the foundation of our recent HBI 2019 Initial Denial Insights Report, available for members here. The report is based on a compilation of initial medical remittances for services rendered in calendar years 2017 and 2018. HBI used proprietary mapping of claim adjustment reason codes to categorize initial denials for this analysis.
The full report includes benchmarks for line items initially denied, and line items initially denied by service setting. Benchmarks are further broken out by U.S. region and included year-over-year trends.
The majority of initially denied line items in 2018 were for noncovered charges – a category for which revenue cycle leaders often lack clear insight as payers rapidly alter coverage. Based on HBI’s definitions, noncovered denials fall into the technical category – these items are noncovered due to predefined benefits parameters, for example, rather than case-specific medical necessity. Perhaps exacerbating this trend is a lack of inclusion of denial staff members in payer contract negotiation. HBI data shows only 8% of organizations with denial staff include them in payer contract negotiations despite their nuanced knowledge of payer behavior and internal challenges.
From 2017 to the end of 2018, initial denials decreased by 3.1% year-over-year. During that time, the prevalence of denials stemming from clinical root causes as defined by HBI increased by 11.1%, but most initial denials in 2018 continued to be prompted by technical errors. High turnover in patient access is a large factor behind technical errors, and revenue cycle leaders are attempting to mitigate this trend, at least in part, by automating some workflows and shifting others back to the patient with self-service tools. However, forward-thinking leaders watching the trend of increasing clinical denials also are investing in clinical documentation improvement programs and physician education efforts.
Analysis: Front-End Staff Turnover Looms Large
Roughly 22% of all initial denials in 2018 stemmed from root cause categories primarily identified with front-end processes. Previous HBI research has found turnover rates within the revenue cycle – and especially on the front end – to be dramatically higher than for healthcare overall. Within patient access, specifically, HBI data shows average turnover in 2018 was 23%, maintaining a three-year trend.
While low turnover in the business office benefits denial management because expertise is retained, losing nearly one-quarter of patient access staff each year is a considerable level of churn that is likely jeopardizing denial prevention. As new patient access staff are hired, effort must be put into their training, and new team members are likely to make mistakes while they learn. Those mistakes cost money.
3 Tips to Prevent Common Technical Errors
HBI research shows these are effective tactics for preventing common denials:
- Prevent noncovered denials by automating documentation of real-time eligibility responses.
- Prevent coordination of benefits denials by providing reference materials that identify payers and plans alongside insurance card images.
- Involve patient access staff in appealing denials caused by their errors to educate them on prevention strategies.
Based on Real-World Data and analysis from our team of expert analysts, HBI 2019 Initial Denial Insights Report is available now for members. To learn more about this report, fill out the form below!