In today’s complex healthcare landscape, healthcare providers face numerous challenges, one of which is effectively managing and optimizing revenue. Claims denials can have a significant impact on a practice’s financial health, resulting in the loss of income and increased costs to rework claims. To mitigate these challenges and maximize profitability, practices need to minimize claims denials. This is where healthcare reporting software comes into play. In this article, we will explore the power of healthcare reporting software and how it can improve a practice’s short- and long-term revenue and efficiency.
What is Healthcare Reporting Software?
Healthcare reporting software utilizes data analysis to examine healthcare claims and their outcomes, including acceptance, rejection, or denial. While some analytics procedures are fully automated, others use more basic software like databases and spreadsheets. By leveraging technology, healthcare reporting software allows practices to identify trends in claims processing and gain critical insights into per-payer denial rates, reimbursement speed, and coding error frequency.
It is important to note that healthcare reporting software should not be confused with claims analysis. While claims analysis focuses on gathering information about accepted, denied, and rejected claims to optimize revenue, analytics is the mathematical and technical component that processes the data and identifies patterns for analysis teams to apply.
The Rising Trend of Denied Claims
Denied claims have been on the rise in recent years, posing a significant challenge for healthcare providers. According to a survey conducted by Harmony Healthcare, providers have witnessed a 20% increase in denied claims over the past five years. The Kaiser Family Foundation also reported an average in-network denial rate of 18% for the 2020 fiscal year. These statistics highlight the urgent need for healthcare claims analytics to identify and address trends that contribute to claim denials.
The Importance of Claims Analytics
Healthcare claims analytics is crucial for identifying and addressing the root causes of claim denials. Without analytics, each denial exists in isolation, making it difficult to understand the broader trends and patterns. Claims analytics enables practices to identify common issues and prioritize them based on their impact on revenue. By analyzing claims data, practices can gain insights into issues such as denial rates, underpayments, and coding errors, allowing them to take proactive measures to prevent and resolve denials.
Let’s explore some practical use cases for healthcare reporting software and how it can help practices improve their revenue cycle management.
Use Case 1: Issue Identification
Without claims analytics, practices lack visibility into the frequency and commonality of specific denial issues. Each denial is treated as a stand-alone problem, limiting the ability to address broader trends. Claims analytics helps practices identify patterns in denials, allowing them to determine whether a denial is an isolated incident or a recurring issue. This information enables practices to prioritize and address the most significant denial issues, leading to more effective denial management and revenue optimization.
Use Case 2: CPT Code Analysis
Current Procedural Terminology (CPT) codes play a crucial role in claims processing. Healthcare reporting software can analyze billing data associated with CPT codes and identify patterns of denials or underpayments. By understanding which CPT codes or modifiers are more likely to result in denials, practices can take corrective actions to minimize errors. This analysis can also reveal common characteristics or coding errors associated with specific codes, enabling practices to improve coding accuracy and reduce denials.
Use Case 3: Payer Analysis
Healthcare reporting software allows practices to organize denials by payer, helping identify payers that consistently return a higher number of denials. By analyzing denials by payer, practices can uncover patterns and trace them back to specific payer requirements. This information can be used to address issues with problematic payers, such as requesting changes to claim requirements or retraining billing professionals. Payer analysis also provides valuable insights for negotiating payer contracts, as denial data can be used to amend contracts to protect revenue.
Use Case 4: Denials Management
Claims analytics helps practices identify the most common reasons for claim denials, such as a lack of referral or prior authorization or exclusions in the patient’s plan. By understanding these patterns, practices can implement measures to prevent denials, such as improving referral and authorization processes or verifying coverage eligibility. In-house analytics offers even greater precision, as practices can run analyses specific to their organization and allocate resources to address the issues that directly impact their bottom line.
Unlocking the Full Potential of Healthcare Reporting Software
To fully harness the power of healthcare reporting software, practices should consider the following strategies:
1. Adopt an Automated Claims Analytics Solution
Automated claims analytics solutions offer the fastest and most cost-efficient way to perform claims analytics. These solutions automate data collection, organization, and analysis, reducing the risk of human error and providing real-time insights. Automated solutions can detect patterns of denials and highlight issues that might otherwise go unnoticed, allowing practices to focus on resolution and revenue optimization.
2. Designate a Department or Individual Responsible for Claims Analytics
While it is possible to conduct claims analytics manually, a dedicated department or individual responsible for claims analytics can significantly enhance the effectiveness and efficiency of the process. Manual analysis becomes more challenging as practice size and billing complexity increase. By designating a person or department to manage the automated solution, practices can leverage the speed and accuracy of software analytics, enabling better utilization of data and more impactful decision-making.
The Benefits of Healthcare Reporting Software
Implementing a robust healthcare reporting software solution offers several benefits for practices, including:
Identifying Revenue Opportunities
Healthcare reporting software helps practices identify patterns of denials and underpayments, highlighting revenue opportunities that would otherwise go unnoticed. By focusing attention and resources on these opportunities, practices can rework and appeal more denials, increasing revenue recovery.
Improving Clean Claims Rate
Clean claims rate (CCR) refers to the proportion of claims that require no edits before submission to payers. Healthcare reporting software can identify administrative errors that need editing, allowing practices to train their billing and coding team to improve CCR and reduce the risk of denials.
Decreasing Days in Accounts Receivable (AR)
Reducing the number of days claims spend in accounts receivable (AR) is critical for practice profitability. Healthcare reporting software helps practices minimize issues in submitted claims, resulting in faster processing and payment, ultimately reducing the number of days claims spend in AR.
Saving Costs on Claim Appeals
Reworking denied claims is a costly and time-consuming process. Healthcare reporting software enables practices to identify and address common errors, reducing the need for claim appeals and saving costs associated with reworking claims.
Automation of data collection and analysis through healthcare reporting software eliminates the need for manual spreadsheet work, allowing team members to focus on revenue-generating tasks. The visual presentation of insights in the software makes it easier to identify and act on issues quickly, improving overall productivity.
Healthcare reporting software plays a crucial role in maximizing revenue and efficiency for healthcare practices. By leveraging claims analytics, practices can identify and address trends in claims processing, reduce denials, and optimize revenue recovery. Adopting an automated claims analytics solution and designating a department or individual responsible for claims analytics can further enhance the effectiveness of the process. With the right healthcare reporting software in place, practices can unlock the full potential of their claims data, identify revenue opportunities, improve clean claims rates, decrease days in accounts receivable, save costs on claim appeals, and improve overall productivity. By harnessing the power of healthcare reporting software, practices can navigate the complex world of revenue cycle management with greater ease and success.