Reducing Claim Denials: Simple Steps That Save Practices Money

As a medical practitioner, you’re probably painfully aware that medical claim denials are on the rise. A majority of providers surveyed in one study saw denials increased by more than 30% from 2022 to 2024.

Claim denials are a silent but often significant drain on medical practices and can cause revenue loss, added stress and staff time. In some cases, it can also cause catastrophic outcomes for patients. 

Is it reasonable to believe that all your claims should be approved? No. But there are proactive steps any practice can take to prevent and address unnecessary denials. With the right denial-reduction process in place, a rate of roughly 5% denied claims can be attainable. 

Here are three key strategies for making an immediate impact on your claim denial rate.

Verify patient data before visits

According to Experian’s 2024 State of Claims survey, one of the main reasons claim denials have skyrocketed in the past couple of years is because of inaccurate or incomplete patient information. In other words, this major cause of denials is completely preventable.

Unfortunately, your claims can be ignored by payers due to errors as simple as a misspelling in a patient’s name. So to avoid both delays and denials, it’s imperative to have a process in place that requires staff to verify the following data for each patient at or before check-in: 

• Full name and correct spelling
• Insurance policy number
• Date of birth
• Insurance eligibility
• Current billing address
• Prior authorization

Checking for prior authorization is particularly important as this is not only linked closely to denials but it’s also tied to additional costs for both the medical practice and the patient, and contributes to delayed or abandoned care and adverse medical outcomes for patients.

Audit claim forms before submitting

Many claim denials occur because of simple mistakes that could have easily been fixed if they had been caught before submission. For example: 

• Missing information
• Invalid plan codes or authorization numbers
• No signature from the physician
• Required documentation, such as lab results or medical records, is not included

Before submitting claims, take the extra step to audit forms and ensure they’re complete every time. Ideally, you’d go a step further and develop a checklist, including a list of required documents, that can be used to review each type of claim.

Stay on top of coding updates

Another leading cause of claims denials is the use of outdated and incorrect medical codes. While staying up to date on annual coding updates is time-consuming, it’s worthwhile for the cost and time it saves. 

Some 43% of medical groups say they address this challenge proactively by hosting an annual compliance week or month for employees. However, if you can’t devote that level of resources to staff education, there are a few other practical ways to tackle the issue:

• Training: Educate staff about coding updates as soon as they’re available for each upcoming year. This can include providing training materials, online courses and testing staff knowledge by having them code practice charts. You might also incentivize staff to obtain coding certifications, such as the certified coding specialist (CCS) certified professional coder (CPC). 
• Outsourcing: Hire a third-party coding agency to assist with updating your staff on ongoing industry changes, auditing claims forms and catching errors.
• AI tools: Around 46% of health care organizations use AI in their revenue cycle operations. When it comes to coding, this can include using tools that flag outdated codes, predict denials and help correct claim errors. You can also implement natural language processing (NLP) technology that recommends billing codes based on clinical documentation.

Learn from denied claims

When a claim is denied, you don’t have to simply accept the loss and move on. Instead, make sure to follow a standard denial management process to understand what went wrong and address the problem. This can include:

• Holding regular meetings to review and track the status of recent denials. 
• Analyzing denial codes to find common errors in your submissions.
• Making adjustments or corrections to specific claims before resubmitting. 
• Addressing common staff errors and updating training materials in real time.

When you have a denial management process in place, you’ll find more opportunities to address denials in a timely manner, and you can even make it a standard practice to do something that more than 80% of practitioners avoid: file appeals. 

Filing appeals can be a time-consuming practice, but it is also potentially more lucrative than you would think. According to a KFF report, an average of 81.7% of appeals to prior authorization denials from major firms were either partially or fully overturned in 2023. For some firms — including United HealthCare, Cigna, CVS and Centene — the rate was over 85%.

The bottom line: Turn denials into opportunities

Reducing claim denials doesn’t just allow you to save money, it’s also a path to improving patient care. Sure, you can hire a third party or implement new technologies to help reduce denials, but that’s not the only way. The key to avoiding denials is making prevention a part of your daily operations, having processes in place to ensure each claim is complete and accurate, and taking the time to learn from and address denied claims.