Breaking the Cycle: Three Ways AI Can Transform Claim Denials

Claim denials remain one of the most persistent and costly challenges for healthcare providers, straining revenue cycles and creating administrative inefficiencies. For many, it’s more than an administrative burden or negative impact on the bottom line. It is a wave that ripples through the entire organization, resulting in an overworked staff, delayed reimbursements and disruption in patient care.

Efforts to improve processes have been made over the years, but denial rates continue to rise. In fact, 41% of providers report denial rates of 10% or higher, illustrating how persistent this significant problem has become.

While artificial intelligence (AI) offers proven results to streamline claims management, adoption remains slow. Roadblocks such as trust in AI, complex integration and workforce acceptance are holding organizations back from realizing its beneficial impact, therefore continuing the cycle of denials, delays and data errors.

Providers don’t have to stay in the unsustainable cycle of manual processes, changing payer requirements and increasing data collection. So, what can healthcare organizations do to make progress?

• Adopt AI solutions that will catch errors in claims before they are submitted
• Optimize resubmissions to reduce staff burnout
• Analyze data to develop proactive strategies, ensuring long-term success

1. Preventing Errors that Cause Claim Denials

Most claim denials are preventable if errors are caught before a claim is submitted. Inaccurate or missing data, authorization mistakes, outdated insurance and incomplete registration are the most common reasons claims are denied, and it’s largely due to manual processes within a fast-paced environment with a revolving door of new staff, and continually changing landscape of new payer rules and requirements. 

A simple typo can cause a denial and add additional work for staff. By leveraging tools with AI, providers can get ahead of the mistakes. These solutions can review claims data in real time and flag inconsistencies and missing or inaccurate data and ultimately, predict which claims are most likely to be denied before they are submitted. This allows staff to fix any errors before submission, making a huge impact on teams’ workload, the bottom line and the entire organization’s operations.

2. Optimizing Resubmissions and Reducing Staff Burnout

Even with preventative AI technologies, some claims will still be denied. When a claim is denied, the staff are burdened with the manual, time-consuming rework to review claims, identify the errors and make corrections. This immense administrative burden strains staff, delays reimbursement and can be costly. In 2022, hospitals and health systems spent an estimated $19.7 billion in an effort to overturn denied claims.

AI can work for and with staff to identify the claims with the best possible chance of a successful appeal. By prioritizing the claims that are worth the time and effort instead of treating every denied claim as equal, health organizations can produce the best ROI for the team’s efforts. Additionally, AI can reference payer rules and regulations to identify where a claim submission missed the mark and guide staff to the correction that needs to be made, speeding up the resubmission process.

Using AI technology for resubmissions allows organizations to optimize staff’s time and energy, reduce burnout and overall, improve processes.

3. Utilizing Data Insights

Breaking the unsustainable and outdated cycle of claim denials is not simply about preventing denials and reworking submissions. Breaking the cycle means driving long-term success. Without understanding the cause of denied claims, it’s hard to prevent them.

AI-powered analytics takes away the guess work. AI can analyze patterns across a high volume of claims and show where processes are failing. Whether the breakdown is at patient registration, authorization or errors connected to certain payer policies, these valuable insights empower provider organizations to update workflows, improve operations and provide additional training to staff to prevent future claim denials.

Combining insights and understanding with prevention and informed resubmissions is a recipe for continuous improvement. It’s the way forward— away from a reactive approach and toward a proactive strategy that results in tangible benefits for the business and the staff.

While there is still hesitation to fully accept the benefits of AI for claims management and take the step to adopt AI into processes and operations, the results are looking positive: among the 14% of providers surveyed using AI, almost 7 out of 10 have seen a reduction in denials and an increase in successful resubmissions.

The key is to make adoption manageable. Deploying an AI pilot in a specific area, such as patient registration or resubmissions, allows organizations to see results and develop confidence in the investment. Additionally, vendors are critical. Healthcare organizations must do their due diligence to find a vendor that is trusted and can implement and scale their AI solutions.

Provider organizations don’t have to live in the cycle of frustration. With the right tools, claims management can be a positive catalyst for change and a driver of success.