Build a denial, write-off and adjustment tracker

It happens, you have had a claim denied. Your staff did whatever they should to try have the claim approved. And if your practice is like most, you actually did more than most. Most offices, a denial quickly become a forgotten loss of your dollars, swept under the rug, never to be spoken of again, and too often, not even reported to you.

A denial is more than a single event that loses you money. It is an event that could be the warning sign of future denials, and it is, if used correctly, a learning opportunity that can save revenue for you in the future. Don’t fail to use these failures are learning opportunities. But to do so you have to track your denials and understand what happened. Not as a punitive tool, but as a learning tool.

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The most important policy and practice to have in place is a rule that there are to be no account adjustments or write-offs without your specific approval. If your staff, especially billing staff can write-off and close out an account without you knowing about it, practice errors that resulted in denials will be hidden, virtually guaranteeing future denials costing you revenue in the future.

Track your denials by having prepared a chart of all denials and account adjustments that your staff needs to perform. They should be charged based on the insurer, wherein the practice (the functions) where the problem occurred, as well as the action, was taken by staff in response, if a write-off or adjustment, what is proposed and the reasons.

Such a chart allows you to see where the problems are occurring in your practice. For example, did the front desk failed to verify eligibility? Fixable. Or failed to assure prior-authorization? Tracking by payer identifies the most problematic plans that you participate with. Is the response to review payer policies, speak to a plan representative, or perhaps reconsider your participation?

Hopefully, most adjustments will be contractual allowances, the difference between what was billed and paid. But wait, even here there should be a question. Reports are that payers pay incorrectly against the allowable fee schedule about 20% of the time, which could easily be costing you money. These are easily appealable, and often not discovered unless charted regularly, and reviewed.

Charting proposed adjustments will also identify patients that have balances that attempts to obtain payment have been unsuccessful. How far do you want to pursue these? Collection agencies are very willing to take 50%+ of the recovery. Or if you have tracked these, you can consider implementing a contingent credit card policy to allow you to bill the balances to patients, rather than chase them. Of course, your knowledge of the patient’s situation may lead you to authorize the write-off of the balance.

Tracking proposed write-offs and adjustments allows you to learn the weak spots in the practice, and then adjust your operation for future avoidance. And it will allow you to quantify the impact on your practice of denials, write-offs, and adjustments, which may also help you understand the impact of decisions on your practice’s financial well-being.

Best EHR Systems for Behavioral Health

1. Amazing Charts EHR
2. BlueEHS by ZH Healthcare
3. Care Tracker EMR
4. Care360 by Quest Diagnostics EHR
5. Cerner EMR