Healthcare providers see a tremendous amount of lost revenue through the denial of claims or the lack of management over denied claims. This is due to strict insurance or payer criteria that cause the number of denied claims to increase year over year. Healthcare providers are constantly battling to manage their counts of denied claims as insurance companies regularly change their policies resulting in new denial appearances. Now more than ever, implementing and maintaining a mature and adaptive denials management program should take priority in any healthcare organization.
Internal audit can play an important role in this implementation through the analysis of denials and overall improvement of monitoring and resolving the denials timely process.
Internal audit can assist healthcare providers evaluate the denials, determine the effectiveness of the current processes to mitigate risk, identify process gaps and provide recommendations for improvement over the denials management process.
When evaluating a healthcare provider’s denials management program, internal audit should assess the following:
Internal audit should also perform data analytics related to the population of denied claims to further understand trends and root causes. The data analytics should be performed for a minimum of a 6-month period to capture an accurate representation of all denials and should address the following in both count of denials and dollar amount of denials:
Categorizing denials both in total population and by department in the following groups: