Unit 8 Assignment CM220

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University of Phoenix *

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Health Science

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Oct 30, 2023

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1 Unit 8 How Claim Denials Affect Revenue Mary Heinrich Purdue University Global CM 220 Dr. Fussell November 16, 2021

2 How Claim Denials Affect Revenue More and more rural health hospitals are closing every year because of the amount of revenue being lost due to claims not getting paid. There are several reasons why claims are being denied. The largest percentage of denied claims is due to clerical errors made in the registration process and the staff not checking insurance eligibility. Falls Community Hospital and Clinic should implement a quality assurance audit for claim denials because this will increase revenue, lower claim denials, and improve morale. The hospital administration needs to realize that getting claim denials under control will increase the hospital's revenue quickly. Having a claim denial management process in place will increase the chances of success (Holyoak, 2017). When there is an increase in claims being denied that is the first sign that something more is going on and it needs to be corrected. The registration assumes that the billing department is responsible for fixing the errors that are made and that is not how the revenue cycle works. The billing department must deal with billing the claims out and the follow-up on unpaid claims but with so many claims being denied due to registration errors the billers can’t do the daily responsibilities of the billing department. Implementing a quality assurance audit will break down what part of the revenue cycle is causing the most loss of revenue. It will also show the department heads which employees are responsible for making the mistakes and what kind of training needs to be done to correct the problem. The employee that made the mistake needs to be the one to correct it because making the staff aware of the mistakes will help the process of correcting the error and that is what will start the revenue heading in the right direction (Merisalo, 2017). If the audits and training continue the revenue will continue to increase. The number one cause of claims being denied is the patient insurance eligibility is not getting checked and clerical errors made in registration. The eligibility should be checked before the patient

3 ever walks through the door (Romeo, 2009). The first time this should be done is when the patient makes the appointment and then again, the day of the appointment because the way insurance is now it could change any given day. The registration and office staff may feel as if checking the patient’s insurance eligibility is the responsibility of the other and not check it at all due to lack of training or knowledge. The clerical errors that cause a claim to deny could be the smallest error and that is why it is so important for the registration clerk to be trained accordingly and to pay attention to the details of the information that is entered. Registration is the front end of the patient's experience and if it is not entered in the system correctly then it is setting everybody else in the cycle up for failure. The problems when ignored will create more issues within the hospital staff. The consequences of the hospital's loss of revenue are increased days in the account receivables, write-offs increase, the cost to collect increases, not having any cash flow, and all departments see the productivity standards as not being attainable. The hospital staff from registration, billing, and the clinic may be arguing about which one is responsible for the revenue loss and the management thinks adding more employees is the solution even though metrics do not show the need for it (Reiner, 2021). The morale will decline fast. The only way to bring morale up is for the staff to work as a team. The team must communicate effectively. Each person needs to take responsibility for the job. Instead of blaming each other the team needs to collaborate to get to the root of the problem (Reiner, 2021). In conclusion, the quickest most efficient way to increase the hospital's revenue is to implement the quality assurance audits for the claim denials and making this change will require all the departments to work together as a team. Communication will also play a key role in accomplishing the goals.

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4 References Holyoak, J. (2017). “Rethinking Denial Management. Most Organizations Take an Administrative Approach to Managing Denials. Maybe That’s Why They’re Not Collecting as Much as They Should.” Health Management Technology 38 (2): 20–21. https://search-ebscohost com.libauth.purdueglobal.edu/login.aspx?direct=true&db=mdc&AN=29474027&site=eds-live Merisalo, L.J. (2017). Registration an essential ally to prevent denials. Health Care Registration: The Newsletter for Health Care Registration Professionals, 26(10), 1-11. http://libauth.purdueglobal.edu/login?url=https://search.ebscohost.com/login.aspx? direct=true&db=bth&AN=124313949&site=eds-live Reiner, G. (2021, May 18). Success in proactive denials management and prevention, HFMA. https://www.hfma.org/topics/hfm/2018/september/61778.html Romeo, T. (2019). Leading cause of denials and how to prevent them. Contemporary OB/GYN, 42-44