5 Strategies to Reduce Your Claims Denials

The industry benchmark for denied claims in hospitals is only 2%, but many healthcare organizations experience denial rates as high as 20%. This effectively means that 1 out of every 5 claims they submit to the insurance firm or carrier is denied. If you take into account that the average cost of reworking a claim is around $25, and the success rate is often as low as 55%, it’s understandable why denials are dreaded by healthcare organizations.


It’s not a lost cause, though; in fact, a majority (about 90%!) of denials could be prevented with the right medical billing and coding process. If you’re facing claim after claim behind denied, here are a few things you can do to fix it. 

"Use cheat sheets and have processes in place to make sure every insurer's deadlines are adhered to"

1. Confirm coverage.

Before providing a service, and even before scheduling a patient for a particular procedure, your front office should verify that the insurance firm a) covers the procedure, and b) that this specific patient is eligible.


Sometimes a claim will also be denied if your staff doesn’t first get an authorization code. These authorizations are typically only valid for a specific time, after which they expire. Keep track of all authorizations and make sure this does not happen. Apart from that, also make sure that authorized claims can be backed up by medical necessity, or they might be denied once again.

2. File claims on time. 

Every insurance company has its own requirements for when claims should be filed. Missing a deadline will typically mean the claim is denied. That’s why it’s so important to make sure that something as simple as an office backlog or clerical oversight won’t start a process that could cost your organization thousands of dollars.


A good option is to use cheat sheets and have processes in place to make sure every insurer’s deadlines are adhered to. The patient schedule should be where everything starts. Use that as a basis to make sure every claim is submitted on time, and confirm that it has actually been received by the insurer.

3. Stay up to date with the latest insurer requirements. 

Medical billing regulations and rules often change at an alarming rate. Every year, old codes are discontinued and new codes are introduced. This means that healthcare organization administrators have to spend money and time training their staff and on software updates. You could also hire a professional healthcare billing and RCM service. Either is a good investment that will pay off when you have fewer denials. 

4. Be as specific as possible when coding the diagnosis.

Always use codes that deliver the highest possible degree of specificity, completeness, and accuracy. This is one of the best ways to make sure claims aren’t denied. In the case of an ICD-9-CM code, for example, that would mean providing a 5-digit code. If there isn’t a 5-digit sub-classification for a specific procedure, a 4-digit code will have to be assigned, but wherever it exists, the 5-digit code has to be used. Your coding matters. If your team doesn’t know how to code properly, it’s critical to get them the training they need to do their jobs effectively. 

5. Follow every claim’s progress through the entire payment process. 

Without keeping track of all claims right until they’re paid, there won’t be any way for your organization to pinpoint problem areas and find permanent solutions. In many instances, healthcare practices spend up to 14% of their total revenue following up on rejected claims, so your hospital or ASC should do everything in its power to identify problem areas and make sure they’re eliminated.

Improve Collections and Reduce Denied Claims with Professional Healthcare RCM Services

We know how overwhelming the billing and collections process can be. At Ultimate Billing, we’ll handle all of it for you so you can avoid the stress and headaches, and instead put your attention on building a profitable healthcare organization with happy patients. 


If you want a drastic improvement in your organization’s collections and revenue, set up a quick consultation with our team today. We’ll recommend the best way for your healthcare organization to turn its numbers around and get the results you’re after.

Ultimate Billing exists to reduce the business burden of healthcare, allowing our clients to focus on patient care.

RCM Services with Ultimate Billing