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September 9, 2022

5 Best Strategies to Reduce Claim Denials

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Payer denials is becoming a major concern for healthcare practices. Although you are doing everything to submit accurate claims to payers, denials still exist. So, how can you prevent denials while improving your appeals strategy? No matter how hard you try to reduce denials, they still happen. However, with a strong strategy, you can minimize your denial rate and make sure that denied claims get paid on time.

Top Reasons for Payer Denials

To avoid claim denials, your staff will need to understand the most common reasons for denials. Here are a few of them:

  • Data-entry errors
  • Ineligibility
  • Misused modifiers
  • Wrong procedure codes
  • Using outdated CPT codes

Communication is the Key

When addressing claim denials, it is important to maintain effective communication between front office staff, clinicians, and billers. Communication and quick data transfer play the key role in claim management.

The best practice is to route front end issues causing denials back to the individuals responsible to modify the procedures. Giving specific feedback to clinicians about the reasons for denials can help combat the problem. Clinicians have to document and capture the charges to support optimal billing. Also, measuring clinical procedures and spelling out the policies that employees must follow will reduce error rates.

Additionally, reimbursement requests from payers must be quickly followed up. It is important to track claim denial rate and improve the performance on a regular basis. Payers will have to work with providers to quickly complete any medical claims.

Leverage Technologies

With increasing denials, healthcare practices will never be successful without proper management. Practices should be able to flag and prevent errors that cause denials. Effective communication alone cannot solve this problem; hospitals and healthcare systems should opt for proactive denial management, which means adapting technology to automatically and proactively flag claims for denials and address these claims before they get submitted.

In an age where the healthcare industry is becoming more focused on compliance, using automation to improve quality can help ensure compliance. In addition to this, leveraging your team’s insights and expertise, and taking advantage of claims-scrubbing systems can help you catch errors before you submit them. Choosing an EMR (Electronic Medical Record)/ RCM (Revenue Cycle Management System) that has a layer of scrubbers for checking errors that might cause claims to be denied before it goes out is the best thing you can do.

Technology can help share data more effectively between payers and providers. Also, automation could help payers streamline their reimbursement cycle. Make sure the system you adopt have privacy and security controls in place. EMR can help streamline workflow and automate the information exchange within and out of a health plan. Combined with better payer communication, this can help healthcare organizations to drastically reduce denials.


Predictive analytics can help anticipate which claim is going to get denied and why. This allows healthcare practices to provide required information to the payer before the claim gets denied. Practices should have to deploy these capabilities and leverage the power of technology to change the paradigm instead of completely relying on staff. With predictive analytics, providers can improve revenue cycle interactions and minimize friction in collection payments.

Prioritizing Counts

Addressing all denials at once is daunting. However, prioritizing can help fix this problem. Start with your biggest impact and once it is resolved, move to the next-biggest problem. Where you start is important. You can either start with the one that is a high priority or low priority, but, prioritization pays for a practice of any size.

Tracking Coding

When it comes to avoiding claim denials, it is important to better manage the medical coding, especially after the implementation of the ICD-10 code. With codes affecting the payer-provider relationship due to transition, it is important for providers to monitor the entire claim process.

Make sure you fix any medical coding issues before sending the claims to the payers. Have alert systems in place to figure out why a claim is denied and what coding errors occurred can help billing departments. However, with the ICD-10 transition, healthcare providers have not experienced any setbacks by adopting a new diagnostic coding system.

By understanding why insurers deny medical claims and communicating effectively with other staff and clinicians, your billing staff can mitigate claim denials. Also, deploying standard processes and protocols for submitting appeals will improve your chances of being reimbursed. Analyzing claim denials helps you identify patterns and opportunities to streamline your internal operations and prevents future claim denials.

Healthcare practices that take these steps can help prevent denials while improving reimbursement cycle. As payers and providers work for value-based care, the healthcare costs will go down and revenue will be increased in the long run.

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