Utilization Denials Take Many Forms

Utilization Denials

Nov 26, 2018

Dan Low
Vice President of Operations
Healthcare Financial Resources, LLC

Automated safeguards don’t generally exist in most hospital billing systems when it comes to filing insurance claims. The result is that errors that should be caught on the front-end slip through to cause denials down the road.

Who hasn’t experienced this? You’re trying to buy something online and think you’ve filled out all the necessary purchase and shipping details, but the order locks up because some key piece of information is missing or wrong. Usually, the online interface will flag the box associated with the data in question – whether it’s a zip code or credit card number — and you can quickly make the change and submit your order.

Unfortunately for hospitals and health systems, this kind of automated safeguard doesn’t exist in most billing systems when it comes to filing insurance claims. The result is that errors that should be caught on the front-end slip through to cause denials down the road.

Populating the incorrect field

Here’s one example of how bad data can lead to utilization denials: Prior authorization may have been obtained by the hospital from the insurance company for a specific procedure or service. But the department staff fails to populate the authorization code in the appropriate field within the billing system. (This can happen when the platform has more than one place to include the code). That means the utilization bill (UB) doesn’t receive the code. Alternatively, the location of the code may be right, but the code itself is wrong.

Either way, the hospital will face a denial that requires time and effort to resolve. Avoiding the problem in the first place is straightforward: Create a rigorous, systematic procedure to ensure the billing staff clearly understands the sole, appropriate field for the authorization code, and understands which services require an authorization based on carrier guidelines.

Skipping prior authorization

Another common mistake that hospitals make which results in utilization denials is to assume prior authorization isn’t required when in fact it is. The culprit may be aging software loaded with dated and/or inaccurate information. It may be that the procedure is considered experimental by the payer. Or it may simply be complacency on the part of the staff.

Regardless of the reason, the solution once again is simple: Make sure you’re up-to-date on procedures that necessitate prior authorization for each and every payer. And be sure you have the personnel and technology to check every claim against the list.

Missing elective procedures

Utilization denials can also occur when staff believes a prior authorization is necessary for a procedure that is typically self-pay, such as cosmetic surgeries like a lap band, breast enhancement or tummy tuck.

By chasing an authorization or submitting a claim with the expectation that it will be paid, staff wastes valuable time and delays billing the appropriate party, the patient. The solution? Develop a system that automatically moves claims for these kinds of procedures to the self-pay bucket.

Comprehensive denial resolution

Healthcare Financial Resources (HFRI), a leader in accounts receivable recovery and resolution has focused exclusively on the challenge of hospital payment delay and denial resolution for nearly 20 years. From this effort, we’ve perfected a powerful approach that relies on a combination of robotic process automation (RPA), intelligent automation and staff specialization to streamline and accelerate the resolution process.

Equally important, our root cause analysis enables us to recommend process improvements to help decrease aged and denied claims on the front end of the revenue cycle. For more information about how HFRI can help you, contact us today.

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