What do you lose by not taking up denial recovery services?

Denial recovery is a process of picking up denied claims and working on them actively to identify the root cause of denials and resolve the problem so the denial can be converted into a successful reimbursement. Many healthcare practices have their own denial recovery service teams, and others choose to outsource the process.

As a healthcare practice, what do you lose by not taking up denial recovery? Here are five points to be aware of.

1.Increased rate of denials

One of the most logical results of not working on denial recovery services is an increased denial rate. As the name suggests, denial recovery works on converting denials into reimbursements. So when there is no denial recovery team to handle this, then the number of denials each day is going to increase. 

2.Increased A/R days

Another problem with not having a hands-on denial recovery service team is an increase in the accounts receivable days (A/R days). A/R days is the number of days between filing a claim and getting a successful reimbursement. The typical A/R days for the healthcare industry is anywhere between 30-60 days. 

If the A/R cycle is extended, it means it is taking more time for claims to be converted into reimbursements, and this, as a result, brings down the cash flow at any point in time. 

A healthy and consistent cash flow is important for the financial stability of the organization.

3. Increased rates of write-offs

A write-off is something every healthcare provider hates because it directly means lost revenues. However efficient a provider’s billing and coding team may be, some denials are irreversible, and that means the provider will have to write off that value in their books. 

However, when the provider doesn’t focus on effective denial recovery services, it means that the number of claims that have to be written off increases. The more the write-off figure, the less the profits generated will be. 

4. Missed opportunities

Another very important result of not having a good denial recovery service in place is missed opportunities. What does that mean? Every claim filed is an opportunity – an opportunity to make money and to improve patient experience. Losing the claim affects both the revenues generated and the trust the patient has in believing that their bills will be settled on time, as expected. 

5. Increased administrative tasks 

Very simply, avoiding denial recovery services is an easy way to pile up unnecessary and unwanted administrative burdens on your other employees. Let’s say there is no dedicated team to handle denials. Now, the existing billing team will have to wade through denials while already handling billing and transmission.

For starters, they may not be doing a great job because they are overworked. Secondly, billers don’t often come with the expertise to successfully convert denials into claims. So, they may be wasting time and not bringing in needed results. 

Conclusion 

Making use of denial recovery services may be a smart way to handle denials and have firm control over the number of claims that have to be written off, which otherwise could have been avoided. Taking the help of a third-party denial recovery service provider may be the easiest way to curb increasing denials.