Ultimate Guide to Denial Management

A recent analysis indicates that over the past few years, there has been a 23% increase in the average claim denial rate. These unpaid services for medical practices negatively affect  the stability of the company’s finances by causing missed or delayed revenue. However, before you start blaming insurers for denying your claims, stop, and consider your denial handling plan and strategy.

Your firm may experience financial mismanagement if you do not take action to safeguard your claims from rejection through enhanced denial management. A variety of long-term care facilities, including assisted living communities and nursing homes, depend on Medicare reimbursement for the services they offer to their clients.

SNFs, or skilled nursing facilities, in particular, are compensated for services rendered under the Patient-Driven Model. The procedure for locating and handling denied claims in the long-term care reimbursement process is known as “denial management.” This is the key to any kind of revenue cycle management in the healthcare industry. The clearinghouse sends messages by the software. In this article, we will discuss what are the types of denials, the causes, and the process of rectifying them.

Types of Claim Refusals or denials

There are generally five types of denials

Rejections based on Eligibility: These are the hardest kind of rejections to overcome, but they can be avoided by paying close attention  to the best categories  of denial management methods.

Clinical Reasoning Denials or Medical Necessity Denials: these are some of the hardest levels of denials to receive meaningful returns from the service providers. They need the fully-enabled Utilization Management Team to manage the denials. These are the denials where the payers have the feeling and understanding that the charges are unreasonable. Therefore, the denials are typically added with the significant cost of labor and clinical appeal.

Authorization Denials: These denials can be avoided and reduced by proper denial management as well, as they occur due to a lack of Pre-authorization. This can be relatively a common requirement and need of many payers. Services that have a higher cost, like implants, imaging, and certain advanced radio-surgical techniques, need a provider to get approval from a payer before working on the service and seeking reimbursement.

Billing Denials: These are all “technical denials” and are frequently the result of human errors rather than the current technology. This can be typically missing the number of the guarantor, name misspellings, and missing occurrence fields. Nevertheless, no long-run facility of care can reduce such issues completely.

Coding Denials: These are the consequence of mistakes and errors that occur from a type of claim that is coded wrongly or incorrectly. These all issues should be checked and corrected during the process of documentation before re-submitting the claims. 

Understand the cause of your denials

Long-term care institutions like yours can resolve the issue of denial and stop it from occurring again. This they can do by figuring out what are the causes in the first place in the denial management process.

The denials can occur due to the following reasons

  • Duplicate type of billing.
  • Up-coding means using a high level of paying code on a claim to get a high level of reimbursement.
  • Unbundling is like itemizing a bill for different tests or methods that have been typically billed together to increase reimbursement.
  • Termination of coverage.
  • Prior authority of delivery of service is required.

How you can check the claim denials?

Create a workflow inside a team

A perfect level of denial management process makes sure that the denials have been handled efficiently and quickly. You should have a team in the facility who can designate the individuals, especially for addressing the denials of the claims. Doing this helps support the work to be more streamlined and organized and can help a facility reduce any further level of claim denials.

File your appeals within a week

Long-term care facilities like yours should work on your appeals within one week of denials. You should do this to make sure that the denials are addressed in a fast manner. This also will give your facility the time to collect the additional documentation for the process of appeal.

Supervise the progress of your appeal

To make sure that the denied claims have been handled in an effective and timely manner, your long-term facilities should have the track for the denial claim from the time you receive this. By performing so, you can stay informed about the status of the denials. This will also measure that all steps of the denial management process have been taken to solve it quickly. This also allows better communication between the team of denial management and the rest of the departments within your organization.

Hold accurate records throughout the appealing  process

You should also keep track of all the relevant information related to the claims. Long-term care providers like you should give the needful and accurate documentation for the support of the claim. This can help to speed up the process of the appeal.

What are the Benefits of Denial management?

The management of the denials is crucial to achieving the process of revenue cycle management goals. Thus, there are various benefits to managing the denials in your healthcare organization. Some of these are clean and improved claim rate, increase in revenue collection and enhancement in patient care and experience.

Improved clean claims rate

One of the most important benefits of denial management is improvements in the clean claim rates. A clean claim is the category of the claim that does not have any missing information or mistake and that is processed and paid on the first submission.

Every time a claim is denied costs significantly and it also increases the cost of the administration, the working hours of the staff, and delays in payments. If you can implement the strategies for finding the root causes of the denials and  your rate of clean claim will increase.

Increased net revenue collection

The other advantages of the management of the denials are the increase in the net revenue and collection of the revenue. When denials occur you can miss some revenue from receiving and you can also face payment delays. By the implementation of the proper claim denial management activity, you can identify and rectify the issues that are leading to denials.

Enhanced patient experience and loyalty

With adding to the financial profits the management of the denials can also enhance the experience and loyalty of the patient. The denied claims can lead to a reduction in patient satisfaction. If a patient is happy with your care, they are far more likely to encourage word-of-mouth recommendations, which may result in the acquiring of new patients.

Outsourced denial management services

The other denial management solutions are more helpful when you have the limited resources of the staff. This is the process of outsourcing the denial management work to third-party service providers. Your healthcare organization can go by this process and you can outsource the expertise of the party and have the resources to identify various issues.

For better denial management, you should have details like

The facility’s Tax ID or Tax Identification Number 

National Provider Identification Number or NPI 

  • Name of the Insured person
  • His Date of birth (DOB)
  • Address of the insured person
  • Number of policies
  • Service Dates
  • Amounts billed, etc.


  1. What are the benefits of denial management?

The denial management system can help support healthcare providers like you to reduce the rates of claim denials and improve the health of the finances of your organization. The denial management system can also be a technology-based process that can identify and rectify the issues.

  1. What is the denial management process?

The denial management process is the strategy that has the aim of uncovering and resolving the claim-related issues that lead to medical claim denials. The process is also important to reduce the future levels of denials and give a healthy cash flow.

  1. How many types of denial management are there?

The denials can be of two types

Hard Denial – A hard denial is ageless and permanent and this can not be rectified and/or changed.

Soft Denial – A soft denial is short-lived, and this is payable if all the necessary information is added.

  1. Why is it important for denials to be tracked?

This is very important to keep track of the claim denials and analyze them for the recognition of any pattern and the common issues related to this. This information can be used to make improvements in the billing process and reduce the risk of the same kind of denials.

  1. When should I follow up on a claim?

Making the follow-up on a claim should begin within seven to eleven days of your claim submission to the company of insurance. To receive the claim paid immediately will not only reduce the use of time this can also increase the flow of cash.

  1. What does it mean that your application is currently under review?

“Under review” usually indicates that the insurance manager or human resources is reviewing your application.


Technology-driven manual approaches to denial management in medical billing field will increase your profits. An integrated healthcare system like yours can be achieved by integrating a denial assessment platform.  This can also add the outside medical employees like patient action platforms and remote health monitoring systems. Such a system will reduce the obstructs for payers, increase provider income, and enhance the quality of service. In conclusion, everyone involved would gain from an effective, dependable, and integration-compatible denial management system in the healthcare industry. The Nursing home teams can concentrate on preventing claim denials and efficiently resolving their denied claims by managing a system that will assist in gathering and monitoring information and organizing all documents.

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