MHRCM Solutions


(+1) 512 800 6431
(+1) 270 495 3261




Suite 101, 1250 S A W Grimes Blvd, Round Rock, Texas - 78664, USA

MHRCM Solutions


(+1) 512 800 6431
(+1) 270 495 3261




Suite 101, 1250 S A W Grimes Blvd, Round Rock,
Texas - 78664, USA

Strategies that Help to Prevent Medical Claim Denials

Denials in Medical Billing have become an important concern in healthcare practices. Even though you try to submit clear claims, still denials may occur. At the same time, by following an effective strategy, you can reduce the denial rates and ensure that these denied Medical Claims are getting paid on time.

Claim Denials in Medical Billing leads to delay in revenues. Management of Health Insurance Claim Denials is necessary. Denial Management in Medical Billing is a necessary aspect in ensuring the accuracy of coding. In this blog, let us see the importance of Denial Management in Medical Billing and the strategies that help to reduce Medical Claim Denials.
Medical Claim Denials

Know About the Denial Management in Medical Billing

The aim for any submitted claim is payment. To achieve this, you need to ensure claims are sent out clean at the very first time. You need to have keen attention towards people and process. Make sure that the right people in the right position are empowered with correct training and operation procedures to ensure billing departments for smooth running of coding and billing.
Despite all things being placed in the right places, denials may occur in certain cases. At such instances, the goal is to correct errors, enable payment, and decide what action to be taken to avoid the same error repeating. After that, the objective is achievable by the people and process at right place.
When Medical Claim Denials occur, appropriate corrective actions must be analyzed to reduce claim failures again. This includes completing each action within the deadline that aligns with the payer requirements. It also involves analyzing the severity and probability of occurrence, detection of top failure modes. Also, the corrective actions are estimated to check the efficiency.
In many cases denials can be easily avoided by maintaining an audit system that ensures whether the claim is efficient before it leaves the building. Some of the mistakes that lead to claim denials are invalid/missing authorization numbers or truncated codes.
Even after evaluating the claims before submission, there are some denials that may occur. But they are not medically necessary.
For effective management of claim denials, knowledge is the key to be remembered. To act on that knowledge, several solutions can be implemented to handle the impacts.
Know the Status
Once you identify the initial denial, you need to begin understanding the denial rates and open new opportunities to eliminate errors.

Keep the Medical Claim Processing Organized

Denied Medical Claims will affect the organization’s revenue. Hence, implementing a management process, includes tools and technologies to track submitted claims.
Immediate Action for Denied Claim
Since Appeal Submission is a complex process, it needs attention immediately, otherwise it can be missed.
You need to follow an efficient process to rectify the denied claims fast. Within a week, you need to establish a strategy that corrects the denied claim.
Focus on Quality
You can maximize the limited resources and time to follow the claims that are already addressed. This facilitates more quality Medical Claims than increasing low-quality claims with no use.
Conduct Performance Audits
Performance Audits include analyzing payment reviews, zero payment claims, registration and insurance. Regular validation ensures the performance of claim submissions.
Meet Deadlines
Submit your claims within the specified timeline to avoid claim denials.

Ensure Accurate and Complete Documentation

There are possibilities where billing may differ with the coding sent from the doctor. This may cause a huge impact such as creating miscommunications. To avoid this type of defect, documents are necessary. Clear Documentation ensures proper coding at first time. Documentation includes details relevant to the service such as process workflow and service status. If your service receives a denial related to documentation, find ways to rectify and improve the process.
Staff must be educated about the payment updates and requirements for new documentation.
Learn from Previous Claim Rejections
Improper or incomplete data may lead to claim rejection. Information regarding insurance company and payer ID lists are maintained as Electronic Health Records (EHR). Tracking and analyzing the rejection helps to easily learn where the defect occurred and how to rectify it.
Choosing the Claim Formats
You need to choose the suitable Claim Formats relevant to your service. This helps to minimize the claim denials.
Verify Patient Information
Verify patient information such as insurance coverage and educate staff about the policies to improve the data quality.
Prior Authorization (PA)

Prior Authorization is an important process in Health Insurance Medical Billing. Physicians and other healthcare providers acquire pre-approval from health insurance plans before a specific method, service, device, supply, or medication is supplied to the patient to be eligible for coverage.

Prior Authorization helps to control the cost factor and avoid claim denial possibility. It ensures whether the service the physician requests is necessary. When multiple specialists are involved in it, it makes sure that the service is not being duplicated. In addition, it estimates whether the ongoing service is useful in enhancing the patient’s health.

Health Insurance Claim Denial Reasons

Find out the reasons that lead to Health Insurance Claim Denial.
Health Insurance Claim Denial
Information About Bad Habits and Pre-existing Illness
If you include previous illness and bad habits, it may lead to rejection of health insurance claim.
Making Cashless Claim at Non-Network Hospital
If you make a cashless claim at a hospital that is not connected with the insurance company, then the Medical Claim will be rejected.
Services Not Covered for Health Insurance Claim
Certain services are not covered by the Health Insurance Plan. If you claim for those services, it will be rejected.
Not Informing the Insurance Company on Time
Within the specified time, you need to inform the insurance company about hospitalization. Otherwise, the company can reject your claim. In case of planned hospitalization, get the authorization before admission. In case of emergency hospitalization, inform the company within 24 to 48 hours of hospitalization.
Apart from this, there are also other reasons such as incorrect coding, insufficient medical necessity, network issues, pre-authorization requirement, duplicate claim and no eligibility verification.

Preventive Measures to Minimize Claim Denials

Since it is not possible to eliminate Medical Claim Denials, there are various types of strategies that help in reducing them. Look at the strategies to reduce the Medical Claim Denials that affect the company’s revenue.
Measures to Minimize Claim Denials
Set Up a Denial Management Team
Teams of people are involved in Denial Management to identify and resolve Medical Claim Denial. This team can be designed to immediately process the denied claim, submit the appeal and make sure that a refund is received. Their focus is to identify the root cause and set up a process to reduce Medical Claim Denials in future.
Know the Difference Between Denied and Rejected Claims
Rejected Claims cannot be appealed. It does not include coverage information. Instead, Physicians can correct and resubmit them. In the case of Denied Claims, it does not meet coverage criteria. Physicians can appeal for most of the claims.
Appeal Denials
If you don’t receive a denial, then appeal it. According to a survey, only a small range of providers are found to appeal after denial. Some of the issues can be avoided by automating your insurance billing procedures.
Outsourcing is one of the efficient steps of Medical Claim Processing. Claim submissions without any error can be handled by Medical Billing experts. If there is any claim denial, they can analyze the reason and resubmit the claim without delay.


MHRCM has discussed the Health Insurance Claim Denial reasons and how it affects the revenue. You may get to know about the several strategies that help to prevent Medical Claim Denials. By following a strong and efficient strategy, you can easily minimize the denials and handle Denial Management effectively. For more insights, please visit our blog. The focus of Insurance providers is to facilitate validated and efficient Medical Claims.

Frequently Asked Questions
How Can You Prevent a Denied Claim?
There are several strategies that are used to prevent denied claims. Some of them are identifying the root cause that leads to denial of claims, validating the insurance and its benefits, training physicians and healthcare providers and setting up a management team.
How to Control Denials in Medical Billing?
Categorize the denials, improve the quality of patient data, avoid including assumption reasons and define the true reasons for denials. You can also involve Claims Management Software for Optimization.
What is Meant by RCM Medical Billing Services?
Effective Revenue Cycle Management plays an important base for efficient Medical Billing. The key benefits of RCM in Medical billing are it enhances cashflow, minimizes billing errors, increases revenue generation, and improves patient satisfaction.
What are the Steps in Handling Claim Denials in Medical Billing?
When an insurance company rejects a claim, they must provide a clear explanation also. You need to carefully review whether all the relevant information is available within the insurance claim. Making appeal is the next step. This includes sending a formal request to the insurance provider to review the denied claim.
Related Resource
About the Author
Elena Kinsley

Elena Kinsley is a seasoned Content Strategist and Chief Technology Officer (CTO) specializing in medical revenue cycle management (RCM).

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