Healthcare organizations in the United States face many problems managing insurance claim denials. These denials can hurt both money coming in and how well the organization runs. Many denials mean losing money and more work for staff. The University of Kansas Health System shows how leaders supporting staff and involving them can lower denials over time and improve money flow.
This article looks at how leadership and staff working together helps reduce denials. It also shows how using data and automation can fix common denial issues. The example comes from the University of Kansas Health System, which had a 25% denial rate before starting a big improvement plan. Medical leaders and IT managers in the U.S. can learn useful ideas to handle denials better.
When healthcare providers send claims to insurance companies, some claims get denied for many reasons. Denials delay payments and create extra work because claims must be checked, fixed, and sent again if possible. According to national data, the Centers for Medicare & Medicaid Services (CMS) deny about 26% of all claims, which is a large number. Nearly 40% of denied claims never get sent again, meaning money is lost that could have been saved.
At the University of Kansas Health System, their denial rate was 25%, much higher than the industry best practice rate of 5%. This difference caused millions of dollars to be lost every year. Problems like poor workflows, missing or wrong insurance information, and bad communication between clinical and financial teams made things worse.
The effort to improve denial management at the University of Kansas Health System started with strong support from leaders. This support was key for long-term success. Hospital leaders saw that reducing denials was not just a billing issue. It involved clinical, operational, and financial work.
Executives set clear goals and showed their support openly. This made all staff see the project was important. A leader was chosen to keep denial reduction a priority and make sure it got the resources needed.
Leaders also encouraged a culture of ongoing improvement. This culture helped teams take responsibility for denial numbers and see how they affected money and patient care. When denial prevention was linked to better patient experiences, like fewer billing problems, both clinicians and staff understood why submitting correct claims mattered.
Reducing denials over the long term means staff on the front lines must be involved. The University of Kansas Health System found that without staff being involved, denial reduction efforts had little effect.
Healthcare providers play an important role by gathering correct patient insurance and personal information when the patient arrives. Mistakes here often cause denials later on. Office and billing staff need proper tools and training to check insurance eligibility and get needed approvals before services.
To handle this, the health system created a special claims denial management team. This team had members from different departments. Their job was to watch denial trends, find chances to improve, and help departments talk to each other. The team was a place where staff could report problems, share good ideas, and work together on fixes.
Regular training and feedback helped staff understand how their work changed denial rates. For example, clinicians learned that writing thorough notes and sending approvals on time helped claims get accepted. Administrators saw how wrong or missing data hurt money flow.
One big problem the University of Kansas Health System had was too much data that was hard to use. Staff said there was so much raw data, but it did not show clear actions to take.
To fix this, the organization improved how it used data analytics. They built a special analytics tool within the Healthcare Analytics Warehouse. This tool showed data in ways that clinical and operational leaders could understand. They could see why claims were denied, watch changes over time, and decide what to fix first.
Having clear and useful data made teams more open and responsible. They could track progress and stay motivated to reduce denials. The analytics helped assign problems like insurance checking failures and missing approvals to the right departments to fix.
This focus on data helped move denial work from a random, late reaction to a steady, organized priority. The hospital saw clear results, including $3 million in ongoing savings due to denial reduction and an estimated $4 million saved each year.
Besides leaders and staff, technology has become important in managing denials. The healthcare field now uses artificial intelligence (AI) and automation tools to cut down on paperwork and improve claim accuracy.
AI tools like automated phone systems and digital answering services help healthcare providers better talk to patients and get correct data. Automating routine questions on insurance eligibility, appointments, and approvals reduces mistakes and speeds things up.
Automation lets staff focus on harder problems, cutting delays caused by missing or wrong insurance info. When patients give insurance details through AI tools, this data goes straight into electronic health records or billing systems. This stops common denial causes from data entry errors.
Workflow automation can also track approval status. For example, automated alerts can warn billing staff about approvals that are about to expire or insurance changes, so claims can be submitted on time. These tools reduce reliance on paper and separate systems, which often cause high denial rates.
Health IT managers in the U.S. can find useful AI and automation tools to include in their denial management plans. Adding these tools to current money cycle processes helps staff work better and improves teamwork between clinical and financial groups.
A key lesson from the University of Kansas Health System is that reducing denials is not a one-time job but a constant process needing teamwork and clear communication.
Healthcare groups must build denial management plans that help departments share information. Leaders should keep staff involved by giving regular updates on progress and problems based on easy-to-understand reports.
This way, hospitals and clinics can quickly spot denial patterns, find root problems, and create fast solutions. When clinical staff see how their notes and data gathering affect operations, they feel more responsible. Financial teams with good data can act quickly and use resources smartly.
Data shows 90% of denials can be prevented, and two-thirds can be recovered. This proves how well-run denial programs can cut re-work, improve cash flow, and help healthcare providers stay financially stable.
For healthcare leaders and IT managers who want to lower denials, the University of Kansas Health System shows the value of a wide, data-smart approach with strong leadership and staff involvement.
By combining clear leadership with knowledgeable and involved staff, U.S. medical practices can improve money flow and make denial rates go down for good. This method leads to more claims being accepted, less lost money, and better use of staff resources. It also helps clinical and financial teams work toward the goal of giving good patient care without extra money problems.
The healthcare field keeps changing with new technology and data tools. Practices that focus on denial management with strong leaders, engaged workers, and smart automation will be better prepared to handle money challenges and keep income steady. The University of Kansas Health System’s example shows that lowering denials is possible with the right plans and effort.
The University of Kansas Health System faced a denial rate of 25 percent, which was significantly higher than the best practice benchmark of five percent.
Contributing factors included inefficient processes, limited staff engagement, inadequate analytics, and poor communication between clinical and financial teams.
The organization set a multi-pronged approach, improving collaboration between clinical and finance teams and focusing on early identification of revenue cycle issues.
Strategies included building organizational commitment, establishing a dedicated denials management team, and enhancing data analytics capabilities.
Analytics helped identify root causes of denials and make data visible and actionable, leading to informed decision-making and targeted interventions.
The organization achieved $3 million in recurring benefits and $4 million in annualized recurring benefits due to reduced denials.
Leadership provided visible support by endorsing the initiative, designating an executive champion, and communicating the importance of the efforts to clinical staff.
Engaging clinical and operational staff helped foster a collaborative environment where improvements could be more effectively implemented and sustained.
The organization developed an analytics application within its Healthcare Analytics Warehouse to visualize denial data effectively, replacing inadequate EHR reports.
The University of Kansas Health System continues to refine its analytic tools and engage operational leaders to tackle and prevent payer denials.
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