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Denial Management – Types, Reasons, and Best way to Successfully Manage It

Denial management (DM) is an integral aspect in any health organisation for healthy cash flow, and a successful RCM. ABA providers need to determine the reason for denials, lessen the risk of future denials,and strategize to get paid faster.  

Any DM involves the following steps collecting, tracking, reporting, forecasting, and measuring claims denied for payments by insurance companies or carriers as it helps forecast the losses in revenue.

In recent studies conducted by the Medical Group Management Association (MGMA), have estimated it costs $25-$30 to manage an average denial. A report in 2020 found is that at nearly 27%, registration and eligibility remain the top reason for denials and continue to shine a spotlight on the need for innovative solutions that drive greater intelligence and automation into the front end of the revenue cycle, says Nick Raup, associate vice president, product management, revenue cycle solutions, Change Healthcare.

While the Change Healthcare survey discovered that the three of the top four causes occur at the front end of the revenue cycle, with authorization/pre-certification (11.6%) and service not covered (10.6%) also figuring prominently. Overall, most denials are caused by front-end issues.

ABA practices are aimed to serve individuals with ASD (Autism Spectrum Disorder). Hence billing for ABA is unique, where the bills need to be submitted weekly across multiple service locations such as clinics, schools, homes, and communities. Any Denial Management needs a high level of attention while processing it and every ABA provider needs to understand that its DM is directly integrated into RCM. This will provide effective support for ABA denials management and help oversee the process that does not have any cashflow fallouts in an ever-changing environment. 

Types of Denials in ABA

Denials Spectrum can be classified into two main categories:-

  • The types that are irreversible and often result in lost or written-off revenue are known as Hard denials  
  • The types that are temporary and can be reversed if the provider corrects the claim or provides additional information are known as Soft denials

Top Five Rea\\

sons for Denials

The AMA‘s National Health Insurer Report has pointed out 5 main reasons for denials which include:

  • When Claims have Missing information 
  • When there are Duplicated Claims 
  • When there is Pre-authorization for services 
  • When an Uncovered procedures claim is submitted
  • When Claims are filed past the expiration period 

Most Common Reasons for Denials in ABA Setting

  • When Treatment is being stopped abruptly without notice 
  • When unauthorized hours need to be cut back 
  • When treatment does not conform to the level of care/guidelines 
  • When the patient is overaged to avail of the benefit
  • When the patient’s cognitive abilities are too low to avail of the benefit

The Most Effective Way in Managing of Denials in an ABA setting is

  • One should rely on available data to help analyze the RCM process
  • Identify and attack the root cause where denials are happening 
  • Pay attention at the beginning when patient registration and prior authorization are ongoing.
  • In case of insufficient documentation, the process needs a structural improvement
  • Staff should be well trained to know appropriate codes, to avoid coding and billing errors
  • Payers behavior would be to identify the root cause and have a solution ineffective solution in its place
  • Each department needs to act responsibly as Denials affect every part of your organization.

DM or Denial management in ABA is directly proportional to growth in Healthcare organizations; it ensures better cash flow and reflects best practices as well. 

A good understanding of the denials process and a well-thought-out plan and integration of the power of RPA and data analytics in the RCM module will ensure any ABA practice to better handling of the denials process. Hence at Amromed LLC, we pride ourselves that our team of experts doing a comprehensive study and understanding the ABA insurance eligibility verification process prior to the initiation of services.

Reach out to learn more about this and other financial obligations we can help you with, such as deductibles, copays, and out-of-pocket maximums.

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