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Importance of Managing Denials

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US health care industry is largely dependent on successful reimbursements from claims made to insurance payers.  However, many a time these claims are denied by insurance companies. There may be several reasons for Denials, like coverage issues with that particular scheme or insurance policy, system of co-payments, minimum pay limit, timely filing, medical coding billing related and so forth.

Whatever the cause, it is a known fact that by careful management of denials, revenue cycle management and physician revenues can be improved by up to 10% than without proper denial management. In most entities, Medical Billing and Coding staff members sort out these issues, but virtually any member of the physician billing office can learn the basics of denial management by self-training and by following a few simple rules of Managing Denials.

Basic rules of Managing Denials:

Depending upon the setting you are working in, the specifics of denial management may vary, but the basics remain the same, regardless of whether the denials involve a physician billing office or the revenue cycle management department of a hospital or medical billing company.

The first step involves identifying and working out the causes that led to the denial of a claim, second step involves devising policies to avoid any such issues in future and also fixing the current situation by careful Analysis of the denied claim. After successfully re-submitting and getting the claim paid, make permanent changes in your billing software and address the situation and possible scenarios to your colleagues so as to prepare everybody to deal with similar situations. Last but not the least, all paper records must be maintained at all costs and any changes made must also be documented for future reference.

Moreover, if any changes in the billing system or EHR software are made, it is very important to issue a complete hand-out or information leaflet to help other staff members in understanding why that change was made in the system and its importance.

Importance of Managing Denials:

Although there are a number of reasons, why claims get denied by insurance providers, it is important to deal and prioritize each case according to the (1) amount of cash involved, (2) cause of denial and (3) need for interventional correction in the system. With successful Denial Management, Physician billing offices and Revenue Cycle Management teams can achieve:

  • Decrease in the chances of claims being denied and saving time in re-processing and re-sending of paper-work
  • By making changes in the system and taking care of the flaws and loop-holes, amount of work and time consumed can be minimized and system can be made more effective
  • More than 10% improvement in Revenue Cycle Management and an increase in steady overall cash flow that helps in stabilizing the healthcare system from failing.


  • Proper documentation and updates saves time for others from repeating the same mistakes and hence lesser claims will be denied in the future


Managing Denials are of utmost importance in Healthcare systems and by devising appropriate strategies, not only less time is consumed in future dealings with Insurance payers but also Revenue Cycle Management can be improved by a vast measure.

For further details about Denials Management and Old AR recovery email or call 818-584-1680

About the Author:

Tanya Gill is the Public Relations Manager for ecare India based in Chennai, India. She has wide knowledge and experience in the medical industry. ecare India is a leading medical billing company offering end-end medical billing, charge entry, healthcare outsourcing,  physicians billing services and is backed by extensive domain expertise, latest technology and dynamic compliance norms. ecare is HIPAA compliant and is the first Indian medical billing company to get ISO 27001: 2005 certified for information security management. ecare is also ISO 9001:2008 certified for quality management. By providing outsourced medical billing services, ecare makes it feasible.


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