ASC Claim Denial Study: Effective Solutions for Top 3 Denial Reasons

Serving over 1,100 surgical clients nationwide for over twenty years, nimble solutions has unique insight into the claim denial reasons for ambulatory surgery centers (ASCs). Our business intelligence and analysis team recently conducted a comprehensive study to explore the most common denial reasons for ASCs and the root cause of those denials. The study analyzed clearinghouse data from ASCs nationwide for the year-to-date period ended June 2023.

During our study, we discovered a trend among commercial payers related to Additional Information / Medical Record Request denials. These denials, often tied to prepayment audits (high dollar audits), have a significant impact on ASC revenue. nimble is currently evaluating patterns across these prepayment audits (e.g., average monetary thresholds, procedure types, etc.) to help our clients prepare for these potential revenue cycle roadblocks.

We look forward to sharing the results of this strategy in upcoming articles; in the meantime, here are the top three denial reasons from our study and recommended preventative measures:

Denial Reason 1: Non-Covered Service (38% of denials)

Solution 1: Verification of Insurance Coverage and Benefit Eligibility 
 ASCs should establish a comprehensive process to verify patients' insurance coverage before scheduling appointments or procedures. When verifying insurance, don't assume the patient's contract terms. For example, Blue Cross Blue Shield (BCBS) insurance cards may look identical but carry different coverage. If you’re in-network for BCBS, check patient benefit eligibility anyway. Patients with narrow or employer-based coverage through BCBS can still render your ASC out of network. Ensure the patient's benefits cover your facility, physicians, and the procedure before proceeding will mitigate non-covered service claim denials.

Solution 2: Establish Clear Communication with Patients
Prior to any procedure, ASCs should communicate effectively with patients about their insurance coverage. Ensuring patients understand what services are covered under their plan, along with any potential out-of-pocket expenses, can help prevent misunderstandings and claim denials. By providing accurate patient estimates and addressing payment questions, ASCs can ensure patients are fully aware of their financial obligations.

Denial Reason 2: Additional Information / Medical Record Request (33% of denials)

Solution 1: Complete and Accurate Documentation
ASCs should prioritize thorough and accurate documentation of all procedures and services provided. For high-dollar claims or procedures involving implants, preparation is key. Having comprehensive medical records readily available to submit with the claim can reduce the likelihood of denial due to missing data. By adhering to specific contract terms by payer for implant reimbursement, ASCs can minimize the chances of receiving additional information requests.

Solution 2: Efficient Record Retrieval System
Implementing an efficient record retrieval system can significantly expedite the process of accessing medical records. Utilizing chart management software, electronic health record (EHR) systems, or secure data-sharing partnerships with other healthcare providers can save time during claim preparation and prepayment audits. Having easy access to documentation will help ASCs address payer requests promptly.

Denial Reason 3: Demographic Error / Patient Eligibility (9% of denials)

Solution 1: Automating Front-end Processes
ASCs should invest in regular training for their administrative staff on data entry, insurance verification, and prior authorization requests. However, human errors can still occur during manual data entry. To mitigate this risk, ASCs should store patient files (insurance card, drivers license, etc.) in an efficient EHR database or leverage chart management software as a primary source of information. Automated processes can help staff notice and correct inaccuracies and reduce denial rates.

Solution 2: Real-time Eligibility Verification
Utilizing real-time eligibility verification tools can help ASCs confirm a patient's insurance coverage and eligibility status before providing services. By verifying patient eligibility in real-time, ASCs can minimize the risk of treating patients who might not be eligible for reimbursement. This approach ensures smoother claims processing and reduces the likelihood of patient eligibility-related denials.
Remember that prior authorization also factors into patient eligibility. Our study determined Prior Authorization denials are nearly as common as Demographic Error and Patient Eligibility denials. While obtaining prior authorizations for all aspects of a procedure ahead of time is one of the most time-consuming tasks for ASC staff, it will help your facility avoid the most common prior authorization denials including: authorization absence, exceeding limits, different services, or referral absence.

Final Takeaways

In conclusion, ASCs can effectively address these top three denial reasons by implementing proactive solutions and reviewing claims data for any patterns with payers or procedures. These strategies will help ASCs reduce claim denials and enhance their financial stability.

For more strategies, join Scott Allen in nimble’s upcoming webinar Thursday, November 9th at 1pm Central - “Address Your ASC’s Claim Denials: Preventive Measures that Work” - register here.

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