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How to manage ‘relentless’ payment denial codes

Medical Billing

Disclaimer: This blog article was written by an AdvancedMD partner. The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or position of AdvancedMD.

‘The mail never stops!’… And neither do payment denial codes.

Do you sometimes feel like Newman from the popular sitcom Seinfeld? (See picture below for reference.) Newman stressed about the mail that just kept coming and piling up. Likewise, perhaps you have experienced similar stress about all the payment denial codes that keep piling up? The more that you resolve, the more they come in.

After working with many AdvancedMD clients over the past four years it is painfully apparent that a great deal of time is spent on payment denial resolution (PDR). There has to be a better way to manage your workflow, right? Let me offer a couple of suggestions.

First, categorize denial codes along two metrics: Priority of the Denial and the Level of Effort & Expertise (LOEE) to resolve. Think in terms of a quadrant where there are 4 types of PDRs:

  • Low Priority Low LoEE
  • Low Priority High LoEE
  • High Priority Low LoEE
  • High Priority High LoEE

Once that categorization is done you can manage the workflow by the two metrics. More senior people can focus their time on the High High PDRs, and less experienced people on the Low Lows. It’s like the application of Adam Smith’s Division of Labor from his book Wealth of Nations 1776. The priority is determined by the dollar value and the number of days unresolved.

Once the payment denial codes are assigned a LoEE and there is a person or team dedicated to resolving them, you can then start to streamline PDR resolution.

Your most experienced people can resolve the difficult ones—and your less experienced people can work on resolving the easier ones. This will ensure:

  • Difficult denials are processed, and yet,
  • Small “slam-dunk” easy denials are processed as well

The goal is to maximize the amount of time and experience your team must resolve PDRs in the most efficient way possible. If this sounds like a good idea…or just too good to be true…or you are not sure how to implement this…or you would like to hear more about it—let’s connect and take back your time.

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After working 25+ years in the pharmaceutical industry in various roles, Pharmafusion founder Jonathan Retano knew there had to be a better, faster, more comprehensive way to use analytics and insights to power business decisions. Jonathan brings unmatched industry experience to Pharmafusion. He is a recognized leader in the area of pharmaceutical business intelligence and data warehousing.

Topic: Medical Billing, Revenue Cycle Management

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