Claims Reprocessing: Best Practices to Improve Recovery of Denials & Underpayments

The difference between claims reprocessing and appealing

Claims reprocessing generally involves simpler, more straightforward corrections or updates, while appealing involves more formal, complex issues. Often, reprocessing can be conducted over the phone. Appeals (most often the result of denials) require a higher level of review by the payer and more work on the provider’s end. It’s important to know when to try claims reprocessing and when to start the appeal process. 

 Go the claims reprocessing route to:

• Correct simple errors: the issue involves straightforward mistakes that can be easily fixed, such as:
  
  • incorrect patient information
  • wrong procedure or diagnosis codes
  • missing or incorrect modifiers
• Update information: when additional or updated information needs to be added to the claim, such as:
  
  • including missing documentation
  • updating service dates
  • adding or correcting charge information
• Address technical issues: when the claim was rejected due to technical problems like:
  
  • electronic submission errors
  • formatting issues
  • duplicate claim submissions
• Fix a deadline miss: when a claim needs to be resubmitted due to timely filing issues. 

On the other hand, these situations call for formal appeals:

• Medical necessity disputes: the payer has denied the claim based on medical necessity, and you're challenging this decision.
• Coverage determinations: when disputing a payer's decision about whether a service is covered under the patient's plan.
• Experimental/investigational denials: challenging a denial based on the payer considering a treatment experimental or investigational.
• Complex clinical issues: when the dispute involves complex clinical judgments or interpretations of medical evidence.
• Policy interpretation: disagreements about how a payer has interpreted or applied their policies to a specific claim.
• Prior authorization disputes: challenging denials related to prior authorization issues.
• Network status disputes: appealing decisions related to in-network vs. out-of-network status.
• Contractual disputes: when the issue involves the interpretation of contract terms between the provider and payer.

The key difference lies in the complexity and nature of the issue. 

As you determine whether to do a claims reprocess or an appeal, keep the potential financial impact of the denial in mind. For high-value claims, an appeal might be worth the additional time and effort. On the other hand, lower-value claims that just need a simple reprocessing can help keep your costs low. 

We discuss the appeals process in depth in our denial prevention and denial management articles. 

Claims reprocessing best practices  

Until a few years ago, the responsibility for checking whether the claim amount received from a payer matches the billed amount fell to the medical billing team, specifically the payment posting specialists or staff members handling accounts receivable.

Anymore, however, providers are using AI-driven, automated contract management platforms to review payments coming in. The platform compares payments to the agreed-upon rates and terms in the payer contract. Like your RCM staff or medical billers, the platform looks for any differences between the billed amount and the received payment. 

If either the team or the platform identifies underpayments or denials, the next decision is whether to submit for reprocessing or take the appeal route. Denials are often prioritized because they represent larger amounts lost. With the issues for the denial listed in clear denial codes (CARC), staff has clarity on what is needed to successfully appeal. 

Because many underpayments can be rectified with simple claims reprocessing, we’ll focus on that in this article. Despite a simpler restitution workflow, underpayment recoupment can add up to significant revenue. We’ve helped provider groups and management services organizations recoup millions, even $10 million from underpayments. This revenue can be dedicated to growth initiatives without taking from other priorities.    

Read about the causes of underpaid claims in healthcare to get a deeper understanding of how they arise.  

Take a quick, self-guided tour through a powerful contract management and underpayments identification tool:

Accurate data collection and verification

• Ensure thorough and accurate collection of patient information at the point of service.
• Implement real-time insurance verification systems.
• Regularly update patient information.
• Verify that correct elements (providers, contracts, fee schedules) are loaded in the payer's system.
• Keep payer contracts and fee schedules updated.

Leverage technology

• Utilize advanced healthcare claims management software to automate underpayment detection.
• Implement tools that provide real-time visibility into payer contract performance. 
• Use claim scrubbing technologies to detect and eliminate billing code errors.
• Use analytics to identify recurring issues and trends in underpayments.
• With root causes identified, change workflow to limit underpayments. 

Streamline the reprocessing workflow

• Group similar underpayment cases to process and appeal more effectively.
• Develop automated workflows for standard appeals to expedite the recovery process.
• Submit batch claims for similar underpayments to increase efficiency.

Staff training and education

• Invest in ongoing staff training programs on coding changes and regulatory updates.
• Keep staff updated on payer policies and contract terms.
• Provide comprehensive training on underpayment identification and recovery processes.

Streamline submission processes

• Implement batch processing for claims submission.
• Use Electronic Data Interchange (EDI) systems for faster, more secure data transmission.
• Submit claims promptly to ensure timely reimbursement.

Enhance communication

• Establish clear communication channels between front-office staff, billing teams, and providers
• Set up regular feedback sessions with payer representatives
• Foster transparent communication with patients about their financial responsibilities

Conduct regular audits and analysis

• Perform comprehensive claims audits to identify patterns of errors or issues
• Use analytics to analyze denial patterns and gain insights into systemic issues
• Regularly review denials and underpayment to improve clean claims processing.
• Regularly analyze payer reports to identify detrimental payment trends
• Conduct root cause analyses to understand major reasons for underpayments

By implementing these best practices, healthcare organizations can improve their claims reprocessing efficiency, reduce denial rates, and enhance their overall revenue cycle management.