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Implementing an Effective Denials Management System

Not maintaining an efficient denials management system could bring about huge revenue loss for healthcare providers. Payment denials are one way to lose a significant part of the revenue on the go. It was found that up to 8% of overall healthcare revenue declined due to payment denials. Therefore, it is imperative for healthcare organizations and third-party billing partners to ensure steadiness and efficiency in denials processing.

Not just that, the overall financial stability of the healthcare organization is also determined by how they manage its denials. It can also effectively increase or can bring down the revenue collections rate depending on how well the denials are managed. Healthy financial stability means a healthy infrastructure for patients, which in turn means the improved quality f patient care and patient satisfaction.

But how to effectively manage your denials? Let’s see!

What are the 3 key fundamental elements of effective denials management?

It is always important to understand the foundation or pillars from which effective management of services could root. Here are the 3 fundamental keys for effective denials management:


The saying ‘Prevention is better than cure’ comes in handy here. It is always the best option to prevent the occurrence of denials in the first place. This can be engaged during any step of the claim processing – scheduling, registering, pre-admission, or during billing. Be it any step, it is unavoidable for the denial management experts to always track the progress of the claims and inform the respective client on it from time to time.


The second fundamental key to an effective denials management system is the process of analyzing denials that are similar. Categorizing and then de-cluttering similar denials will allow healthcare professionals to understand the root cause of a series of denials and then work on them. And from the data that was gathered from the analysis, they could prevent denials that might occur in the future as well.


Experts must also keenly monitor the claim payment patterns of different payers and set up an automated mechanism that tracks any deviations from the general trend. This is significantly imperative not just to understand common patterns of denials and the root causes, but also to enhance the long-term claims efficacy and help eliminate any occurrences of revenue loss.

Tips to Improve Healthcare Claims

For the hospital’s revenue cycle to be managed effectively, denials must be the main focus. Healthcare organizations may benefit from fewer denials because doing so increases their revenues. Here are some pointers you may use to improve the efficiency of your medical claims management procedures and your denial management approach:

1. Recognize the grounds for claim denials

Analyzing and understanding why your patient’s claim was denied is crucial in healthcare streamlining, financial management, and effective revenue collections. Most of the patients have no clue why their claims were denied in the first place. So, as a healthcare provider, it is your responsibility to educate them and align them with the entire process. The ability to deliver timely help to your patients in unavoidable and necessary.

2. Streamline Denials Management

Denied claims have their way of piling up over long time. This is a serious problem when it concerns to the tracking of claims. Many denials go unnoticed and therefore reimbursements go unmatched. This will definitely affect healthcare revenue significantly and will bring in a huge gap in the financial stability of the organization. For this, healthcare experts must learn to streamline and simplify the entire denials management system to leave no stone unturned. Hospitals may now monitor and keep a watch on denials that require attention thanks to new tools and technologies.

3. Handle Claim Denials in One Week

Regular monitoring of your claims can result in a system that is more efficient. To construct a good denial strategy, it is crucial to have a solid workflow for your refused claims. There must be a system in place to guarantee that an insurance company’s denial is resolved within a week after you get it.

4. Track the Progress of the system:

Monitoring the growth and achievement of denial management procedure is essential because it enables firms to identify the parts that are functioning and those that require improvement. About your unpaid claims, you must keep records of all wins and losses. The final objective is to use the data at hand to increase the effectiveness of your business denial management plan.

5. Determine the trends and common denial patterns

Establishing a successful rejection management procedure also requires determining the kinds of denials which are most frequent in your firm. Each sort of denial may appear to be a little issue at first, but if you keep an eye on and examine these trends, you can discover significant problems in your firm.

6. Bring in Incentive Programs

Incentives are a great way to motivate healthcare employees. This will not only bring in an effective financial system in place but also a healthy competition amongst the staff. Employees should be properly motivated not only to successfully appeal denials but also to spot trends and share knowledge.

7. Outsourcing Denial Management Process

Choose a professional healthcare third-party organization like Practolytics that specializes in delivering revenue cycle management services, including denial management, to handle your denial management processes. The best denial management companies employ specialized staff with extensive training in managing the intricacies of the insurance model. You’ll have more time to focus on your core strengths if you outsource your denial management needs.

Key Benefits of Effective Denial Management

Resolving claim denials is an important step in the medical billing procedure and has a number of benefits. The following are some of the main advantages of managing healthcare claims denials:

  • The income stream is increased as denial factors are found.
  • The core reason of denial patterns can be found by gathering and analyzing them, and for such types, a workable remedy can be developed.
  • Aids you in keeping track of, prioritizing, and appealing denials based on laws and case references from the federal and state governments that support the medical provider’s appeal.
  • Evaluate the success of resolutions to denials
  • Improve business processes to prevent denials in the future.

Reach out to our experts at Practolytics for progressive information on RCM, denials management, credentialing, contract negotiations, eligibility verification, and more.

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