Practice Management – How to Deal with Denials

Updated on April 21, 2020

When it comes to managing a practice of any size, dealing with claims denials is an important part of the daily routine that very often can be improved. Put simply, failure to adequately recoup denials from insurers means lost revenue, and when those denials are extrapolated over the long term, this can significantly impact your bottom line. Improving and dealing with denials effectively then, can help your practice thrive. 

The key for medical practices dealing with claims denials is to develop a focused strategy that can be drawn upon as a resource to help avoid bad debt. It should aim to identify, manage, monitor, and prevent denials across the entire practice, giving staff the tools needed to efficiently challenge denials and recoup lost revenue. Here then, we take a look at how to deal with denials within your practice and subsequently improve your profit margins. 


Any successful claims denial process should begin by identifying the reasons why a claim has been denied. Whenever a claim is returned unpaid, the insurer will indicate the reason why, and it is your job to log these reasons and look for patterns so that it is easier to minimize denials. This can help you eliminate “user error” issues such as late filing and double billing, while also shining a light into your application processes to allow you to avoid incorrect information, such as the wrong modifier codes or patient details, being entered on claims forms. 

It sounds simple, but the reality is usually far from it. Overly complex insurer forms and applications can make it difficult to o identify the exact reason a claim is denied. However, your entire claims process is based on the first step, and so it is extremely important that it is done correctly and logged in a place that all relevant staff can easily access.  


Confusing workflows in your practice may lead to claims denials. For this reason, it is crucial to standardize workflows and ensure staff have access to all the information required to correctly process and evaluate claims denials. A checklist can help, although online tools and intelligent automation offer the most efficient methods of identification and the most comprehensive insights. 

When it comes to minimizing claims denials, time is also of the essence, and as soon as you identify an issue it is important to begin working on a solution. Effective denial management is basically a list of many small actions that need to be carried out constantly and consistently. Ensure that you don’t waste time fighting losing battles, that you build your argument by learning all of the insurer’s requirements, and that, you enlist the help of expert referrals to support your case.  


Effective denial management processes require monitoring at all stages, from the initial receipt of the denial, through the staff workflows and processing of the denials, to the eventual resolution of the claim. Monitoring should also occur across your claim’s denial process as whole, giving you a comprehensive overview of the management process and your staff’s performance. 

Additionally, monitoring other factors on the insurer level will allow you to identify weak points and problem insurers. To do this, you should sort, categorize and track denials by provider and insurer, calculate denials as percentages and examining cyclical performance, examines the source of denials, and also monitor associated costs and losses. 


The final piece of the puzzle when it comes to managing claims denials is to enact a prevention policy. With the data you have gathered from the previous three steps, you should be well placed to identify opportunities to revise processes, adjust workflows, or retrain staff in order to prevent denials at all stages of the journey. At this juncture, it is important to remember that transparent communication is key and keeping everyone on the same page at all times will ensure your teams are not working at cross purposes. 

Your main targets for the prevention of denials will be in the following categories: 

  • Registrations – Identifying and eliminating registration issues will allow a more streamlined approach to claims and help prevent denials in the future. Provide new training to ensure that registrations are seamless and comprehensive. 
  • Modifier Codes – The complex world of modifier codes is always a potential pitfall. Regular training and access to the latest literature relating to all insurers is critical. Getting it right in the beginning is the ideal way to prevent claims denials.
  • Authorizations – Ensuring authorization processes are followed correctly each and every time cannot be understated. Create a simple workflow that makes it easy for staff to query appointments and alert employees as to prior authorization requirements. 

Dealing with denials is often a frustrating process for staff in any practice. However, by examining your existing processes and workflows, while also leveraging the data generated by your practice and the insurers themselves, you can streamline the process and make it easier for staff to manage, while minimizing losses for your practice too. 

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