Use benchmarks to stop revenue leakage through small-dollar edits and denials

Everyone knows that small expenses can add up fast—especially if they aren’t conscientiously tracked and monitored. But hospitals routinely write off small-dollar edits to get claims out the door. Although few hospitals would hold a $10,000 claim to work a $15 edit, simply ignoring small-dollar edits can lead to big problems later on, including long-term financial issues or even compliance failures. But how can hospitals best deploy limited resources to create smart tracking processes for these small-dollar edits and denials? And how can they determine when they’ve reached a tipping point?

One way revenue integrity can monitor small-dollar edits and denials is by using clean claim benchmarks, says Susan Gatehouse, RHIA, CPC, CCS, chief executive officer of Axea Solutions, Inc., in Atlanta. Tracking and addressing edits are proactive approaches to decreasing denials—or even bypassing denials altogether.

“Edits have taken a backseat to denials when really it should be the opposite,” Gatehouse says. “I think that’s where hospitals are really missing the opportunity. If you’re really thinking proactively, you’re backtracking to find out what’s causing this denial. Is it because we went ahead and billed a claim with an edit when it should have been worked?”

The national clean claim rate is about 80%—out of 100 claims, 80 will pass edits without manual intervention, and 20 will hit an edit that requires manual intervention. Actual clean claim rates might vary by organization and service line, but 80% should be considered the industry benchmark, Gatehouse says.

If the clean claim rate starts to move toward 70%, revenue integrity should take stock of the situation, she says. If the dollar amount associated with the 30% of claims that are hitting edits is high, dig into what claims are hitting edits and track them back to service lines. It’s helpful to have a historical record of clean claims rates overall and by department and service line to use as a comparison point. If the numbers have held steady over the years, the organization might choose to maintain the status quo, but if the clean claim rate takes a dive or the dollar amount rises, revenue integrity should investigate, according to Gatehouse.

“Even if it’s incremental dollars, find out where they are falling and whether they are in areas that tend to be problematic such as drugs, labs, pathology, or interventional cardiology,” Gatehouse says. “Those are the ones you see most often.”

In addition, tracking small-dollar edits and denials can warn organizations of compliance missteps before they escalate, she adds. Revenue integrity can use the data it tracks to target coding audits or find opportunities to fine-tune EHR settings.