Over half of U.S. hospitals ended 2022 with a negative margin as increased expenses quickly surpassed revenue growth. Among the issues heavily affecting the industry are claim denials—they have emerged as one of the most critical financial challenges for healthcare providers to manage, ultimately impacting the financial well-being of both healthcare providers and patients.
Denied claims significantly impact a health system’s financial health and can occur for myriad reasons, including documentation errors or lack of eligibility. Denials can easily stack up and quickly become overwhelming for an internal team, leading to delayed payments. These strains on a healthcare system’s financial stability can quickly hinder its ability to provide quality patient care. Clinical appeals serve as the solution to this problem, allowing health systems to challenge denied claims and recoup appropriate revenue, but this takes time and resources to combat.
Benefits of in-house clinical appeals
Outsourcing clinical appeals is a convenient option for many health systems but has drawbacks. Healthcare organizations gain some key benefits by keeping the clinical appeals process in-house.
Greater Control and Visibility
In-house clinical appeals teams deeply understand their organization’s operations, are already familiar with their specific payer documentation requirements, and can tailor their appeals approach accordingly. This level of control can only be achieved through transparency and optimal metric reporting.
Outsourcing clinical appeals can incur hefty fees, sometimes close to 40% on a contingency basis, so in-house teams are generally more cost-effective in the long run. By investing in the training and development of internal staff, healthcare organizations can build a knowledgeable and skilled appeals team, eliminating the need to rely on external vendors and reducing the financial burden associated with outsourcing. Additionally, in-house clinical appeals teams can identify patterns and trends in claim denials, allowing them to implement proactive strategies to prevent future denials and improve overall revenue cycle performance.
Hospitals often lack quantifiable, actionable data. In-house clinical appeals can transform the revenue cycle by highlighting key denial causes, which may be transferred upstream as learning experiences with measurable results. That is, it tells the hospital exactly where and how a denial occurred in the first place, opening the door to real, tangible opportunities for a fix. For instance, a hospital experiencing multiple medical necessity denials for radiology may want to engage in some specific employee education on medical necessity.
Are In-House Appeals Right For You?
The benefits of an in-house clinical appeals system are great, but it comes with its own set of challenges. Health systems report inadequate staffing, lack of specialized staffing or increased staff burdens as challenges to maintaining in-house appeals. These are common and valid challenges many health systems face. Insourcing isn’t for everyone – some organizations may find a hybrid system is more beneficial. How do you figure out what is the right option for your organization? Consider this.
How is your ability to support remote offices, or are you one of the lucky few to have a wide, talented pool of applicants available locally? Moving to an in-house clinical appeals system could require hiring across several departments, including clinical and IT specialists. What about training programs and software licenses? These things might also potentially need to be remotely supported.
How are you currently measuring your vendor ROI? Have you mapped out an ROI for moving fully in-house, and does it make sense compared to your current vendor plan? It’s no secret that mapping out ROI in healthcare can be complicated, so take the time to make sure all of the numbers add up.
Some states are swiftly passing legislation regarding personal health data, and it’s affecting some vendor contracts. Either switching to in-house clinical appeals or finding a vendor with a 100% onshore team provides peace of mind.
From An HR Perspective
With the internet and the proliferation of home office environments, it’s important to recognize that some states have very different employment laws. New York and California are significantly different than Texas concerning remote staffing. Does your HR department have the experience to manage remote staffing and stay abreast of rules and regulations?
How big of a lift is staff training? Do you already have the resources to train your current or incoming staff? It is key to invest in training and education for the appeals team. By ensuring that the team members have a strong understanding of coding guidelines, documentation requirements, and payer policies, healthcare organizations can significantly increase the chances of successful appeals.
The Technology Consideration
If insourcing is definitely in your organization’s future, what do you need to be successful? Implementing an effective in-house clinical appeals process requires careful planning and the right strategies and tools.
Technology creates a degree of transparency across the organization, allowing leadership to better track results without losing out on the human touch needed to succeed in such a large industry.
Utilizing technology and automation can streamline the appeals process and can help close the gap in moving from outsourcing to insourcing. Artificial intelligence is a key player in claim review technology. The right software can help reviewers streamline documentation, standardize the medical record, and give your team the resources to make data-driven appeal decisions to simplify the submission process. By leveraging AI technology, your organization can reduce errors, improve accuracy, and expedite the appeals process, leading to better outcomes.
In-house clinical appeals can potentially transform a healthcare organization’s revenue cycle. By understanding the importance of clinical appeals and the impact of denied claims, healthcare facilities can take control of their revenue cycle and unlock hidden potential. The numerous benefits of appeals, such as greater control, cost savings, and improved visibility, outweigh the challenges of outsourcing. Healthcare organizations can build a strong in-house clinical appeals process by implementing effective strategies and utilizing the right tools. With the right approach, your in-house team can significantly improve revenue cycle performance and ensure your organization receives the reimbursement they deserve.
How Advent Can Help
Apello, our propriety claims analysis technology, intakes and extracts data from medical records while utilizing a proprietary search functionality that allows pertinent data to be extracted at the click of a button without requiring a cumbersome visual review. Apello supports coders, nurses, and physicians in searching for documents supporting the diagnosis sequencing if the DRG assigned is consistent with the documentation and treatment.
Advent Health Partners provides strategic business intelligence reporting through Advent’s Optics reporting platform. Optics gives clients access to valuable, real-time reporting based on previously disparate denial management data. Create intuitive dashboards with Optics’ flexible framework to display insightful information and pave the way to discovering actionable data points to improve denial management and denial prevention programs.
Get in touch to discuss how Advent can make an impact on your organization.
Expert Denial & Appeal Management
Appeal letters are the key to success in combating denials and improving revenue cycle performance. Get in touch to find out how Advent Health Partners can help your hospital or health system improve your bottom line with our expert appeal and denial management services.