The Importance Of Denial Management In The Medical Industry

The medical industry is a fast-growing one and with the pandemic putting a halt to almost all of the businesses out there, there is one business, in particular, that was far from stopping and that is the business of healthcare. With so many covid cases it was no surprise that many people tried to procure proper medical care for their illness. With the inflow of so many patients, the medical billing services along with the denial management team had to work twice as hard to make sure that everything was in order. 

Denial management is an important part of revenue cycle management. When denial management is not taken proper care of the hospital can end up losing a lot of its revenue to denied claims by the insurance companies. 

What Is Denial Management In Healthcare?

What is Denial Management in Healthcare? What is the importance of denial management?

Denial management refers to the systematic process where the root cause for every claim denial is analyzed in order to gain more clarity about the entire process lest it gets repeated again. A proper denial management strategy also helps in preventing actions in the near future that could have caused claim denials. 

Many medical practices tend to surrender thousands of dollars’ worth of revenue when it comes to denied claims. All of these claim denials result from a lack of well-structured claim denial management procedures and policies. It is important to have a proper set of rules that would allow your claims denial management team to work accordingly without having to face claim denials. 

It is important to lower the number of claim denials by looking at the root cause of why it did occur in the first place. Majority of the time the reason any claim gets denied is because of the wrong use of medical codes. Other times, even if there are no claim denials the insurance company oftentimes tends to pay lower than what was anticipated in the first place – this can lead to a loss of revenue as well for the hospital. It is the duty of the denial management in medical billing to take a look at that as well and solve it as soon as possible. 

Let’s take a look at a list of examples that can help clarify why indeed the denial management process is such an important one.

  1. In the healthcare industry, it has been estimated that the average rate for claim denials remains somewhere between 5% to 10%. Every denial service management company should always aim to have a 100% success rate when it comes to claims submission, however, if it is not possible having a denial rate of less than 5% is always a good thing.


  2. When it comes to public and commercial payers, they tend to deny at least one single claim out of the 10 successfully submitted claims.


  3. It has been estimated that when it comes to the prevention of claim denials the success rate is almost 90%


  4. The gross charges that get denied by the insurance payers have grown from 15% to 20% out of all the claims that are submitted.


  5. 65% of the claims that have been denied by the insurance companies do not get resubmitted by the medical billing services

Understanding The Importance Of Claim Denial Management

What is Denial Management in Healthcare?

For any hospital to run properly it needs a team of medical professionals and an administrative head to ensure that all of the functions are running smoothly. There are a lot of advantages that denial management brings about. 

  1. Focusing on the important things: Medical professionals should be able to take the best care of their patients without them feeling inadequate in any manner. But when they are burdened with administrative tasks it can always become a difficult task to bear. Outsourcing a denial service management company can help tremendously since the administrative tasks do not fall on the doctors anymore, instead, the denial management team can handle it full well. The doctors can therefore completely focus on their patients and give the treatment that they require.

  2. Systematic approach: The revenue cycle management companies tend to use a hands-on and well-structured approach in order to make sure that each of the claims that are to be submitted receives equal attention while also making sure that the process is followed according to a strict set of rules laid down by the company. This ensures that there are no errors whatsoever.

  3. Keeping track: One of the most important steps after submitting a particular claim is to ensure that the claims do not get denied. For this to be successful it is crucial to track the claims and ensure that the payment gets completed. This can help the company since it prevents them from losing out on any revenue whatsoever.

  4. Identifying the common trends in claim denials: If claim denials are common, it would be wise to follow the trends that lead up to the claim denials in order to prevent them from happening any further. This helps in streamlining the denial management process. Furthermore, denial management software also helps in evading claim denials.

Introduce proper inducement programs: It is imperative to put incentives for the staff and the employees in order to motivate them even further. The claims management process can be quite a strenuous job, therefore encouragement from time to time and proper incentives are always appreciated. 

Benefits Of Proper Claims Denial Management

Working on claim denials is an important part when it comes to the process of medical billing and it has quite a few advantages. 

  1. When the cause of claim denials gets identified and rectified the maximization of cash flow is inevitable.

  2. It helps in providing proper reports to the management team which further helps in future decision making for the business itself.

  3. It helps in proper tracking, prioritizing and appealing claims denials that are based upon the state and federal statutes. The citations often favor the appeal of the medical provider. 


It is important to outsource the RCM services to capable companies like Synergy HCLS, since it can not only help your business save a lot of precious resources but also save time.