Lower your denial rate...

Wednesday, December 31, 2008

In January 2002, RemitDATA began publishing a denial tracker in HME News to help providers answer one of their biggest questions: Why aren’t we getting paid for certain claims? Six years later, the average denial rate for a full-line HME provider remains high at 20%, about double the rate for physicians, says Bently Goodwin, founder and CEO of Memphis-based RemitDATA. “There’s still a lot of room for improvement,” he said. Here’s what Goodwin had to say about why it’s more important than ever for providers to keep denials in check.

HME News: Why track denials?

Bently Goodwin: Managers or owners of homecare companies couldn’t get the information they needed to figure out how to run their businesses. They couldn’t say, “Hey, if I’m getting denied for this item all the time, why do I want to keep providing it?” or “Why am I getting denied and how do I keep it from happening again?”

HME: How do providers fix denials?

Goodwin: Every month, providers need to look at the areas where they’re making the most mistakes and develop strategies to eliminate those mistakes. Then they need to go back and measure their progress from month to month.

HME: What’s the king of denials?

Goodwin: Duplicate claims denials. The biggest reason providers get C018s: They’re just resubmitting claims, because they can’t remember if they’ve submitted them already. To fix the problem, some providers ignore all CO18s. But there could be CO18s due to lack of medical necessity—those may be worth appealing. It’s a huge, huge problem.

HME: Why do denial rates remain high?

Goodwin: HME claims get a whole lot more scrutiny - much of it computerized - than physician claims, making it that much harder to bill. That being said, there are some HME companies that have 5% denial rates on a consistent basis.

HME: How are those providers better off?

Goodwin: They collect money faster and they’re spending less money, because they’re getting fewer denials to begin with.

HME: Providers with high denial rates - are their days numbered?

Goodwin: Efficiency is going to be extremely important with the 9.5% nationwide reimbursement cut and the 36-month oxygen cap. It used to be that a provider with a 20% denial rate could still make money. Not anymore.