The volume of commercial payer claim denials continues to rise and the appeals process has slowed, according to a new survey from HFMA.
Claim denial woes continue to plague revenue cycle leaders.
Asked about the greatest threats to their health systems’ revenue cycles, around half pointed to the volume of claim denials from commercial payers, according to a survey conducted by HFMA with sponsorship from Knowtion Health.
Declining reimbursement rates (21.6%) and prior authorization issues (14.6%) rounded out the top three threats identified by the 106 revenue cycle leaders who completed the survey between November and December of last year.
Administrative burden goes up, appeals slow down
Payer requests for information have been increasingly adding to the administrative burden on revenue cycle operations. Just under 90% of survey respondents reported that these requests were slightly or significantly higher than they had been in the previous year.
Meanwhile, commercial payers are moving slower when it comes to processing appeals, with 83% of respondents saying that appeals now take longer or much longer than they did three years ago.
Internal hurdles to revenue recovery
With claim denial volume on the rise, revenue cycle leaders seem unsure how to respond. Asked about the biggest barrier to improving revenue recovery from denials and underpayments, 37.6% pointed to difficulty prioritizing which denials are worked and when based on revenue benefit.
Technology and gaps in identifying documentation and coding errors (26.4%) and not enough clinical support for denial management (17.6%) were the other top barriers to revenue recovery.
Staffing gaps and collaboration woes
If resource limitations affect denial management now, the problem could become even worse. Respondents expect difficulty staffing denial appeal writers (61.0%), denials analysts (58.5%), and clinical documentation improvement (CDI) specialists (53.4%) over the next three years. Meanwhile, 89% expect demand for clinician support for denial management to increase over the next three years, creating a significant resource crunch.
These areas also create internal friction in denial management. Collaborating with clinicians on prior authorization processes (32.4%) and CDI (26.1%) were cited as the greatest points of friction between revenue cycle and clinical teams. This lack of alignment makes it difficult to address the root causes of denials. More than half of the respondents said they can identify payer trends but struggle to pinpoint the root causes behind them.
Technology could light the path ahead
Faced with these challenges, leaders are turning to technology. Asked how they are most successfully addressing the need for clinician input into the appeal process, the top strategy cited was greater automation (60.4%), followed by hiring or repositioning existing staff (50.0%).
This indicates a clear industry trend toward leveraging technology to better allocate scarce clinical and administrative resources in the ongoing battle against denials.
Luke Gale is the revenue cycle editor for HealthLeaders.
KEY TAKEAWAYS
Commercial claim denials are the number one threat to revenue cycles, according to around a half of revenue cycle leaders surveyed.
Lack of resources compound the problem and lead to difficulty prioritizing which denials are worked and when.
Technology could help to ease current limitations with 60.4% of respondents reporting that they are turning to automation as a strategy in denial management.