In Healthcare Revenue Cycle Management, the common meaning of a medical billing denial is, when the insurance carrier refuses to pay for a medical claim/bill submitted to them for the healthcare services.
As a practice owner or administrator, you should know very well what these denials can do to the financial health of your independent medical practice. Well, your revenue gets locked in the Accounts Receivable causing you great pains with your cash-flow, revenue and operational efficiency.
For independent medical practices, denial rates typically range around 7-12%, however for better performing practices this drops down under 5%. Though at Cosentus we have seen practices struggling at about 15-20% as their billing is not optimized, and they lack in expertise and necessary technology. Just so you clearly understand what the significance of these denials is, a 12% denial rate means one out of 8 medical claims will have to reworked by billers or coders and/ or appealed. The cost to rework these claims can add up and dent your revenue significantly.