In the continuous evolving realm of healthcare, the efficient functioning of Revenue Cycle Management (RCM) is paramount. An effective RCM acts as the financial backbone of a DME practice. And in managing DME billing the core critical issue of billing – claim denials.
Understanding Denials in Revenue Cycle Management
Claim denials, the refusal of claims by insurers, pose a substantial threat to the financial stability of healthcare providers. Beyond revenue loss, denials introduce complexities that necessitate effective denial management strategies. The primary objectives of RCM include revenue maximization, error minimization, and ensuring compliance.
According to a recent survey, experts reveal that a significant percentage of DME billing denials, ranging from 40 to 60% stem from small errors on the front-end of RCM, occurring before a patient receives care. These errors are preventable, presenting a substantial opportunity for healthcare providers to either prevent revenue loss or gain additional revenue. However, the intricacies of RCM, particularly when dealing with insurance companies, make this a complex challenge that demands a comprehensive approach.
Denial in DME billing:
Today denials in RCM are commonly categorized as hard and soft. Hard denials involve firm refusals to pay claims, often due to clinical issues or procedural errors that are challenging to appeal. Soft denials are typically administrative or procedural and are more easily correctable. Some common denial scenarios include missing information, coding errors, patient eligibility issues, and lack of prior authorizations.
Impacts of denials in your DME billing:
Denials significantly impact healthcare providers – leading to delayed payments, disrupted cash flow, increased administrative costs, and potential financial instability. As denial rates exceed 5 %, organizations face challenges in covering day to day expenses, maintaining the revenue cycle, managing office costs, and ensuring the financial capacity to sustain operations.
- Financial Impact of Denials – Claim denials can cause a substantial financial impact on healthcare organizations, restricting cash flow, limiting resources for employee salaries, and ultimately reducing overall revenue. A denial rate exceeding 5% can lead to severe consequences, hindering the organization’s ability to cover expenses and deliver optimal patient care.
- Operational Impact of Denials – Denials not only delay cash flow but also affect day-to-day operations by diverting staff attention from essential tasks to denial management. Decoding Explanation of Benefits (EOB) and involving clinicians in denial resolution add administrative challenges, impacting operational efficiency.
With so much confusion, many find it equally challenging to efficiently handle denials and so opt for outsourcing solution. In fact, outsourcing your DME billing to experts has become a common and appealing option for many practices today. This approach has not only helped many healthcare providers effectively navigate evolving regulations and payer rules but also ensure better ROI.
Sunknowledge outsourcing solution for your DME billing:
Taking care of all your pre and post billing services, Sunknowledge Services Inc., for the last 15 + years had been the solution for many DME providers across the healthcare industry in US. Looking after from data management to accounts receivable, Sunknowledge not only has dedicated resources taking care of all your DME Billing problems but also following right checks and balances further ensures an accuracy of 99.9%. Slashing your operational expenses, with Sunknowledge you experience better ROI within one month.
Outsourcing your DME denial to a specialized partner like Sunknowledge you can experience the flexibility, expertise, and scalability needed to navigate the complex landscape of revenue cycle management in 2024.
Sunknowledge Services Inc. – an ISO 27001:2022 certified, American-owned & operated company, headquartered in New York City – is a leading global provider of Business and Knowledge Process Outsourcing services in the US healthcare domain.
