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4 Rev Cycle Stories Tackling Denials Management

Analysis  |  By Jasmyne Ray  
   October 17, 2023

Denial management remains the top priority for rev cycle leaders, with growing need for efficient process and oversight.

There’s been an uptick in denials management issues in the last few months, a complex and costly pain point for revenue cycle leaders.

Here are some HealthLeaders stories to get you up to speed.

Looking to save money? Consider automating your denials management process

In a survey commissioned by AKASA, 78.7% of financial and revenue leaders said denials management required the most subject matter expertise. The same survey found that only 38% of hospitals and health systems are currently automating denials management.

With the risk of inefficiencies and mistakes, investing in artificial intelligence or other technological solutions could potentially save organizations time and money, enabling them to utilize physical staff more efficiently.

The financial implications of denials are huge

According to the 2023 Plutus Health Revenue Cycle Management Challenges Index, 40% of providers are losing over half a million dollars each year due to claim denials and 18% losing over a million.

Claim denials remain a significant issue for providers, making denials management the top priority for many revenue cycle leaders. Some organizations have embraced technological solutions, but the index also reports that others are hesitant to do so; despite benefits like improved efficiency, fewer errors, and accelerating cash flow.

Cigna’s algorithm lands it a lawsuit

Two Cigna members filed a class action lawsuit against the insurer for failing improperly denying their claims due to its PXDX algorithm. The algorithm allegedly allows doctors to automatically reject payments in large groups at a time, without opening or reviewing patient files.

This isn’t the first time PXDX has been scrutinized. In March it was reported that 300,000 requests for payment were denied over two months, with the algorithm spending 1.2 seconds reviewing each case.

Higer rates of prior authorization denials for Medicaid Managed Care members

A report by the Office of Inspector General found that Medicare managed care organizations (MCOs) denied one out of every eight prior authorization requests in 2019. The report illustrates a lack of denial oversight in most states.

Of the 115 MCOs reviewed in the report, 12 had a prior authorization denial rate over 25%. It was also found that state Medicaid agencies didn’t review the rates, and many failed to collect and monitor related data.

Jasmyne Ray is the revenue cycle editor at HealthLeaders. 

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