First time clean claims are a leading indicator of a practice’s revenue cycle management maturity. Medicare defines clean claims as those that have ”no defect, impropriety, lack of any required substantiating documentation—including the substantiating documentation needed to meet the requirements for encounter data—or particular circumstance requiring special treatment that prevents timely payment.” In other words, processing clean claims allows your practice to collect payment in a timely manner.
This article outlines why clean claims are important, reasons that claims are denied, and how to fix the issues you encounter.
Why Are Clean Claims Important?
Your practice should shoot for a 90% first-time clean claims rate. However, many practices that come to RCM360 are struggling to meet that benchmark, and increasing their clean claims rate (CCR) is daunting. One of the fastest ways for practices to increase their revenue, though, is to improve their CCR, reducing days in accounts receivable and receiving payment more quickly. But when claims are denied, roughly 35% of them are never resubmitted, leading to a staggering loss in revenue.
Here are the most common reasons for claims denials, affecting 90% of denied claims:
- Lack of prior authorization. Claims are often denied when authorization is not secured before services are performed.
- Incorrect or missing information from patient information to plan code to required modifiers.
- Procedure not covered by insurer. Evaluate and verify what’s covered by a patient’s insurance plan prior to submitting the claim. This is an easily avoided reason for denial.
- Out of network provider. Some or all of the claim can be denied for providers that are not in-network.
- Multiple or duplicate claims. When the same service, on the same day, by the same provider, for the same patient is filed more than once, each of the claims will be denied.
You can mitigate claims denials by ensuring you have the right people, processes, and technology in place. It’s also imperative to make sure your team is properly staffed and has adequate training on submitting first-time clean claims. When these processes are established, CCR inevitably improves.
How to Increase Clean Claims
After reviewing the reasons claims are most commonly denied, you can see that many have a straightforward fix. These steps will increase your practice’s CCR:
- Keep patient information up-to-date. If you’re not using your RCM or EHR provider to check in on patient data on a regular basis, you should be. Structure workflows to ensure valuable touchpoints with patients, keeping their information current and reducing the risk of denied claims.
- Verify insurance eligibility and benefits. Check on any required precertification or referrals, filing limits, and benefits maximums. Authorization, medical necessity, and benefits eligibility should be verified before a claim is filed, and authorization received ahead of time.
- Code to highest specificity. To reduce denials, code to the fifth digit whenever possible, and keep your codebook up-to-date.
- Use technology to your benefit. Leverage your EHR provider for your RCM, or find out which company they partner with for RCM. RCM360 has a standard process around the principles of simplicity, transparency, and open communication.
Keep Your Claims Clean
If your organization meets or exceeds the 90% clean claims rate benchmark, congratulations! You probably have strong RCM practices in place, but there may still be room for optimization. Follow the tips provided above to continue to increase CCR, and know that if you’re looking for RCM support, RCM360 is here to help.
