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Tip: Claims denial audits

Patient Financial Services Weekly Advisor, May 21, 2004

Monitoring and correcting claims denials has many benefits. Review your facility's claims denials using the following steps from Jean Lambert, internal audit services manager at Milwaukee-based Froedtert Hospital, and Brian Kozik, director of compliance and audit services for the North Shore Medical Center in Salem, MA:

1. Streamline the audit by getting help from a clinical person or a medical auditor. "Many aspects of denial management require familiarity with clinical terms and conditions," Lambert says.

2. Don't shy away from this audit. "This audit can be tedious, but it's an area that more and more facilities are focusing on in the face of shrinking revenue," she says. "The process issues identified can be daunting since the revenue cycle is so complex. But improvements can and will impact revenue and cash flow."

3. Look at write-off trends and write-offs for specific reasons, such as "lack of authorization," Kozik says. "If you see an increase in this category, there may be a problem with front-end capture of patient insurance."

4. Pay attention to filing deadlines for appealing denials.

5. Review any documentation that shows the aggregate outcome of the appeals process.

6. Follow up on any systems issues identified through the audit.

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