Case Management

Case management Q&A

Case Management Weekly, August 29, 2012

Q. How do denials affect the revenue cycle? 

A. Denials delay a healthcare facility’s ability to receive reimbursement in a timely manner, which increases the accounts receivable days. This leads to monthly budgetary problems. A 5% denial rate at a moderate-size facility with 30,000 discharges annually can amount to more than $8 million on an average payment of $5,500. Having this amount in accounts receivable negatively affects a hospital’s ability to pay its creditors and stay in the black. Each 1% reduction in the denial rate for such an institution results in a capture of $1.6 million. 

This week’s Q&A is adapted from Prevent Denials and Win Appeals: The Hospital Case Manager's Guide to Revenue Integrity published by HCPro, Inc.

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