How to Turn Denied Claims into Approved Payments 

Denied claims can feel like a frustrating setback, but they don’t have to be the final word on your revenue. With the right systems and strategies in place, denied claims can be successfully appealed, saving your practice time and money. In fact, denials that aren’t followed up on are like leaving money on the table. It’s crucial to approach denied claims with a plan, ensuring that your practice recovers every dollar it’s owed. 

While denials may have decreased in many multispecialty practices, this isn’t always the case for every practice. If you’re struggling with denials or looking for ways to minimize them further, implementing a few key changes can significantly improve your outcomes. In this guide, we’ll walk through four essential steps to better handle claim denials, including how to streamline your resubmission process, reduce errors, and make the most of appeal opportunities. 

Establish a Clear Process for Handling Denied Claims 

One of the most important steps you can take to reduce the impact of claim denials is to establish a routine process for managing them. Denials might not happen every day, but when they do, they should be handled with the same consistency and efficiency as any other part of your billing workflow. If your staff has to stop and think about how to respond to each individual denial, they’re more likely to waste time or, worse, overlook important details. 

To avoid this, create a standard operating procedure (SOP) for addressing denials. Having a set algorithm or workflow in place helps your team respond quickly and consistently. This not only reduces the chances of making errors but also ensures that denied claims are resubmitted before deadlines expire. 

Additionally, having a structured process for claim follow-ups can help your team prioritize more effectively. They’ll know immediately which claims need urgent attention and which can be processed with routine updates. This means your practice won’t be stuck deciding which claims to resubmit and which to let go, a common pitfall that can lead to financial losses over time. 

Steps to Create an Effective SOP: 

• Identify key denial reasons: Analyze your past denials to determine common causes, such as missing information, coding errors, or lack of prior authorization. This will allow you to build protocols that address these issues upfront. 

• Create a triage system: Not all denials are equally time-sensitive. Create a system that prioritizes denied claims based on potential financial impact and resubmission deadlines. 

• Train staff regularly: Ensure that your team is familiar with the SOP and knows how to apply it to various scenarios. Regular training can prevent mistakes and keep everyone aligned with the latest payer policies. 

Have an Appeals Template Ready to Go 

When a denial happens, the last thing you want is to scramble to draft an appeal from scratch. Having a pre-prepared appeals letter template can save time and improve your chances of success. While appeals might not be needed often, having a template on hand ensures that when they are necessary, you’re ready to respond quickly and professionally. 

An appeals template is especially useful because it allows you to plug in specific details, such as patient information, dates of service, and the exact reason for the denial. You can personalize the letter as needed without spending extra time drafting it from the ground up. 

A streamlined appeals process also ensures you meet payer deadlines for appeals, which are often short. Missing a deadline could mean permanently forfeiting reimbursement for the denied service. 

Stay Updated on Payer Policies and Procedures 

One of the most effective ways to reduce claim denials is by staying proactively informed about payer policies. Insurance companies frequently update their guidelines regarding what services they cover, preferred providers, labs, and other procedures. Keeping track of these updates is essential for ensuring that your claims are submitted correctly the first time around. 

While larger practices may have dedicated billing teams, smaller practices often find it challenging to keep up with the constant changes. One solution is to assign specific staff members to monitor updates from each payer. In larger practices, this can mean designating a single employee for each payer. In smaller practices, you might task one person with keeping an eye on updates across all payers. 

Key Benefits of Staying Informed: 

• Reduced denials: Staying on top of payer policies can help avoid denials caused by coding errors, submission of outdated claims, or incorrect prior authorizations. 

• Improved relationships with payers: Regularly reviewing payer updates demonstrates that your practice is committed to compliance and professional billing. 

• Faster claims processing: Submitting claims correctly the first time means fewer denials and faster reimbursements. 

Regularly review payer websites, bulletins, and newsletters to ensure your practice is aware of any policy changes. Ideally, these reviews should happen at least once a month to keep everything up to date. 

Submit Denied Claims Promptly 

Time is of the essence when resubmitting denied claims. Insurance companies have strict filing deadlines, and missing these deadlines can mean losing out on the chance to recover your payment. The best approach is to work on denied claims as soon as they are received. 

This is particularly important for claims that are returned from the clearinghouse with minor errors, such as incorrect information or transposed numbers. These types of claims are typically easier to resolve, and addressing them quickly can prevent payment delays. Resubmitting claims promptly ensures that you don’t lose time in the overall filing and appeals process. 

Tips for Staying on Top of Denials: 

• Set up alerts in your EHR or billing software to notify you when a denial comes in. 

• Review clearinghouse rejections daily, as these are often simpler to fix and can be quickly resubmitted. 

• Monitor timely filing deadlines for each payer to ensure you don’t miss opportunities to recover denied payments. 

In addition to prompt resubmission, be aware of the most common reasons for denials, such as missing pre-authorizations or plan changes. While some denials are inevitable, understanding why they happen allows you to reduce their frequency and increase your chances of success on the first submission. 

Be Proactive with Claims Monitoring 

Data analytics tools within your EHR system can be invaluable for tracking claims and identifying potential issues before they become denials. Running regular reports on your claims can help you spot trends, such as delays from specific payers or recurring errors in your submissions. 

If you notice that a payer is taking longer than usual to process a claim, reach out and inquire about the status. This proactive approach can prevent denials and help you address any issues early in the process. 

Recommended Reports: 

• Monthly payer report: Review payer performance, such as payment speed and denial rates, to identify any problem areas. 

• Daily rejection report: Keep an eye on claims rejected by the clearinghouse and address them promptly. 

By taking a proactive stance, you can minimize the time it takes to resolve denials and reduce the likelihood of future denials altogether. 

Dealing with denied claims may seem like a hassle, but it’s also an opportunity to recover lost revenue and improve your practice’s overall financial health. By establishing clear processes, using templates for appeals, staying informed on payer policies, and addressing denials promptly, you can ensure that your practice maximizes its claim reimbursements. 

Remember, while resubmitting denied claims may seem like extra work, having a structured plan in place will streamline the process and help you avoid unnecessary financial losses.