The Ultimate Playbook for Mastering Claims Denials and Winning Appeals
Introduction It has been four years since the COVID-19 pandemic began, and the healthcare industry is still grappling with spiraling costs and declining revenue streams. This is further complicated by the increased difficulty in generating and keeping the hard-earned revenue needed for survival. Claims are being processed slower, healthcare providers are waiting longer for payments, and denial rates have spiraled out of control. In short, the industry is not in a new normal but at a crossroads. According to a study published by the American Medical Association in January 2023, the dollar value of denials increased by 67% in 2022 compared to the previous year. Furthermore, a recent study conducted by a revenue cycle analytics company revealed that the initial denial rate for over 1,700 hospitals monitored by its software platform has reached 11%. This translates to 110,000 unpaid claims for an average-sized health system. According to CMS data, U.S. healthcare spending reached $4.5 trillion (about $13,500 per person) in 2022. Based on these numbers, it is easy to determine the financial repercussions of denied claims on the healthcare industry. This is even more concerning given that healthcare expenses are estimated to increase at an average rate of 5.4% annually over the next decade. If this trend continues unchecked, it will cause irreparable harm to the healthcare industry and ultimately put patients at risk. In simple terms, providing services without correct payment is economically unsustainable. It’s well known that hospital closures are becoming more commonplace, which begs the question of whether these closures could have been avoided if hospitals had received the revenue they were rightfully owed.
In other words, to what extent are claims denials contributing to the healthcare crisis we are currently facing?
This comprehensive guide dives deep into the complexities of appeals and denials and offers ideas how to navigate them toward a more financially stable future for the healthcare industry, ultimately benefiting both providers and patients.
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