Denials are an annoying, yet inevitable, part of the revenue cycle; but that doesn’t mean you can’t minimize denied claims. In fact, 86–90% of denied claims are preventable, per the Kaiser Family Foundation.
Almost half (49.7%) of claim denials are caused by problems on the front end, per the Change Healthcare 2020 Revenue Cycle Denials Index. Denials are an annoying, yet inevitable, part of the revenue cycle; but that doesn’t mean you can’t minimize denied claims. In fact, 86–90% of denied claims are preventable, per the Kaiser Family Foundation.
While there are a lot of reasons for claim rejection, this post will target the largest reason that claims get denied: front-end issues.
Change Healthcare broke down front-end caused denials even further with the following statistics:
Registration/eligibility problems account for 26.6% of denials.
Authorization/precertification problems account for 11.6% of denials.
Service not covered problems account for 10.6% of denials.
Provider eligibility problems account for 0.9% of denials.
Some of these denials are unrecoverable losses and other are easily recovered, though monotonous to continually appeal. The only truly positive part about front-end denials in the healthcare industry is that most are entirely preventable. If your front-end processes are contributing to your denials, you can make immediate changes that will quickly and positively affect your revenue this fiscal year.
Accounting for a little over one-quarter of all denied claims, registration and eligibility continue to be a huge problem in the American healthcare system.
Denied claims that stem from these issues might include things like demographic data mismatches and ineligibility. In other words, the insurance company received a claim with lots of missing or incorrect information right from the beginning. This might come from patient or staff data entry errors, or a patient may not realize that they’ve given different information to their healthcare provider and their insurer.
Other registration and eligibility-related issues include things like coordination of benefits, invalid authorization, benefit maximums being reached, denied authorizations, plan coverage and a patient’s services exceeding what was authorized.
Registration and eligibility can be daunting for revenue cycle management (RCM) experts, but it’s actually not a terrible weak spot to have if it’s your biggest pain point. It means you can immediately reduce denials with some diligent process changes (to registration, prior authorization).
Mistakes and broken processes at the very beginning of the patient encounter have a ripple effect that often ends with a denial. Since so many eventual denials stem from issues having to do with registration and eligibility, your physician practice’s front desk and registration staff play a huge role in preventing them.
It’s not a bad idea to implement a robust and tech-driven pre-registration workflow that completes crucial registration steps with patients prior to their service.
At least 24 hours before a patient’s scheduled service—but preferably earlier—the physician practice should:
Verify patient information such as demographic data
Verify patient insurance coverage and benefits
Notify the patient of their financial responsibility according to HFMA’s “Patient Financial Communications Best Practices.”
Without a strong pre-registration process in place, it’s easy for one patient’s name to be spelled incorrectly or another patient to have a brand-new insurance that they forgot to tell you about since their last visit. Before you know it, you’re stuck with denials.
Practices can use technology (such as Rivet) to automate these processes. This could include enabling real-time insurance eligibility verification, rather than relying on outdated and time-consuming methods like phone or fax.
Rivet’s estimates and eligibility software, for example, lets you run eligibility checks in bulk actions and collect accurate payment from patients before services are rendered. It integrates into your Electronic Health Record (EHR), keeping patient information consistent across your records. It’ll even detect possible prior authorization needed so you can even prevent denials that way, too.
Payers use prior authorizations—essentially, giving the healthcare provider an up-front OK to perform a service—to save money and make sure a procedure is safe and necessary for a patient before they receive it.
Although lots of physicians say prior authorizations delay care and take away their authority to make medical decisions for their patients, they’re still a fact of life, and failing to obtain one when a payer requires it will lead to denials that could have been avoided. The less time spent in follow up, the smoother the process will be.
The key is to proactively check prior authorization requirements and obtain any prior authorizations before delivering patient service. To streamline this process, you can use automated tools (such as Rivet) that integrate with your practice’s EHR and alert practitioners that a prior authorization is needed when they place an order.
Reducing front-end claim rejections requires a proactive approach to improve data entry, ensure insurance eligibility, and establish clear claim submission workflows. Here are some strategies to help healthcare providers minimize claim denials due to front-end issues:
Accurate Data Entry and Patient Information Verification
Accurate patient information is essential for clean claims. Staff should verify all demographic and insurance information during registration to avoid claim rejection. Small errors, such as incorrect spelling or date of birth, can result in rejected claims.
Insurance Eligibility Verification
Verifying insurance eligibility before a patient’s visit is crucial for reducing claim rejections. Using real-time eligibility checks through automated tools ensures that the patient’s coverage is valid and up-to-date, reducing errors related to eligibility mismatches.
Implementing a Pre-Registration Process
Establishing a pre-registration workflow can improve efficiency and reduce the likelihood of front-end rejections. This process allows healthcare providers to confirm insurance details, determine financial responsibility, and address potential issues in advance.
Prior Authorization Management
Failing to obtain prior authorization is a common cause of denials. By integrating prior authorization checks into your EHR system, staff can receive alerts when prior authorization is required, ensuring that all necessary approvals are obtained before treatment.
Using Claims Scrubbing Technology
Claims scrubbing software checks claims for ICD-10 codes, CPT codes, and other critical elements before submission. This automated tool helps reduce errors related to incorrect information or missing modifiers, which are common causes of claim rejection.
By focusing on these strategies, healthcare providers can significantly reduce front-end claim rejections and streamline their revenue cycle management processes.
So, let’s say you get robust software, change your registration and eligibility processes and clear up issues with prior authorization. Unfortunately, no matter how much of your front-end processes you change, you’ll still have denied claims.
But now you’ll have exorbitantly less denials than before, and you’ll boost your net revenue without seeing more patients. Overall, you’ll see great changes that help your practice run smoother and you’ll see revenue that you probably wouldn’t get to see otherwise.
That’s because even though two-thirds of denied claims are recoverable, the MGMA estimates 50–65% of denials are never reworked. A solid claim submission process can and does have a strong effect on reimbursement for your practice.
To read about claim denials in more detail, check out our free eBook, "How to Avoid Denials."
Follow the link to learn more about Rivet’s denials management software, or schedule a demo for a personal introduction to this powerful suite of revenue cycle management tools.
To read more about denials, check out our free ebook, "How to Avoid Denials."
To learn more about Rivet, download this one page PDF:
1. What is front-end rejection in medical billing?
Front-end rejection refers to claim denials that occur due to errors made during the initial claim submission process. These issues often stem from inaccurate patient information, eligibility mismatches, or missing prior authorizations.
2. Why do front-end issues cause claim rejections?
Front-end issues, such as incorrect data entry or invalid insurance eligibility, lead to rejections because the claim lacks required information or has inaccuracies that prevent payers from processing it correctly. Proper claim submission practices help reduce these errors.
3. How can healthcare providers reduce front-end claim rejections?
Healthcare providers can reduce front-end rejections by implementing thorough pre-registration processes, verifying insurance eligibility in real-time, and ensuring accurate patient data entry. Automated tools like claims scrubbing can also help catch errors before submission.
4. What role does prior authorization play in front-end rejections?
Prior authorization is required by many insurance companies for certain procedures. If a provider fails to obtain it, the claim may be rejected. Verifying prior authorization needs before the service can prevent such rejections.
5. What are some common causes of claim denials at the front end?
Common causes include incomplete patient information, errors in demographic data, lack of insurance eligibility, and missing or incorrect authorization details. Proper data handling and pre-checks can reduce these types of denied claims.
6. How does eligibility verification help prevent claim rejections?
Verifying insurance eligibility before a patient visit ensures that the coverage is active and correct, minimizing errors that can lead to claim rejections due to eligibility mismatches or invalid insurance details.
7. What is the difference between front-end and back-end denials?
Front-end denials occur due to errors made at the beginning of the claim submission process, such as incorrect patient information or missing authorizations. Back-end denials arise from issues found later, often related to coding errors or payment disputes.
8. Can automation help reduce front-end rejections in medical billing?
Yes, automation tools can help verify insurance eligibility, track prior authorization requirements, and validate claim information in real-time, reducing the likelihood of front-end claim rejections and improving revenue cycle management.