Denial Management with Root Cause Analysis

The structure of the healthcare financial management organizations which often have silos where they should have integrated contiguity often precludes the ability to analyze the root cause of claim denial. Without understanding the cause and the source, claim denials keep mounting and the effort to resubmit claims becomes such a labor intensive project that many healthcare organizations and physician practices would rather write it off.

The real secret behind correcting errors at the source and fixing the ones that have occurred and thus been rejected is to have a “Real Time Integration” of all of the elements of the revenue cycle. This doesn’t just translate to hiring a Revenue Cycle Manager, but rather the approach should be the presence of analytics in each area of the revenue cycle that can clearly pinpoint the causes, create a trending report and then work with the source of the errors in meaningful collaboration where accountability and responsibility are clear.

Many organizations are in denial about their rates of denial and tend to tell themselves many are fixed. Some may be fixed but at what cost of re-work and resubmission? The best way to tackle the problem is to have a “Denial Management and Root Cause Analysis” team that can bring rapid feedback to the sources of the problem. For instance, the Medical Staff should not have to wait weeks to hear about a claims denial for either the professional component or the hospital payment; they should be prepared to have information given to them by the Denial Management Team which should be an integrated component of the Revenue Cycle Group. Denial Management is not all science; it is also an artistic management form which allows creative solutions in a team environment. No more pointing fingers and blaming the system. The enemy is within and requires counter intelligence operatives who can go to the source work with the clinical teams, the HIMS staff, and everyone else. Then monitoring the results of the interaction and intervention should be published to all of the players involved. These principles are at the very heart of the solid Health Care Financial Management at all levels.

Denial Management without the Root Cause Analysis component is like doing a procedure without knowing anything about the patient. Revenue Cycle teams who work closely with clinical services should have a Denial Management capability built in. If at the local level, the denial is incomprehensible, then it goes to the Counter Intelligence Team to find the source, the cause and the fix. By the way, no one said it would be easy because first and foremost human beings are involved and they can make mistakes. Raising consciousness while relating closely to the Clinical Staff and others is the artful way of fixing the problems.

For 27 years Health Systems Management Network has been working with clients to set up Denial Management and Healthcare Financial Management directly related to Root Cause Analysis.  Let us know what your needs are at or call us at 866-908-4226.