Hospitals and health systems focus on preventing denials for many reasons. Perhaps they want to get tighter control over shrinking margins, preserve revenue integrity or accelerate cash. While these are valid motives, organizations often struggle most with the piece of the denial lifecycle where providers feel they have the least control: how denials impact a patient and how they may alter perceptions or the level of trust the patient population has in a care provider. Hospitals and health systems sometimes view denials management with blinders on, focusing squarely on how to stop the slow bleed monetarily. However, in doing so, providers often overlook one of the most significant reasons to keep denials in check: poor denials management can lead to significant and avoidable hits to patient satisfaction metrics.
How Patients Hear About Denials
Patients are most frequently made aware of post-service denials directly from their insurance carriers via an Explanation of Benefits (EOB) sent to the patient’s home. Since most patients are not overly familiar with how the claims process works, they may not know what the significance of an EOB is, how to read it or the practicality of what it means. Insurance companies are not great about explaining how to read an EOB, and when patients see that all or a portion of their claims have been denied, they can have a fear-based response out of concern for what that denial means for them monetarily. Even if a denial primarily affects the facility’s reimbursement, and the correspondence is only meant to inform the patient, the absence of a clear explanation can cause confusion and distress for a patient during the time when he or she should be focused on recovery.
Patients can also hear about denials from a hospital’s financial services department. A hospital may reach out to a patient to clarify and validate the information from the patient before resubmitting a claim in an effort to overturn the denial and get the patient’s claim processed for payment. This may cause patients to worry as they wonder if the claim will be processed successfully the next time.
Another scenario where a patient may become aware of or directly involved in the denials process is when organizations try to involve patients in denial disputes. In these cases, the hospital or health system may require clarification and/or verification from the patient regarding his or her insurance information. They may request that the patient complete forms to obtain plan documents from the carrier denying the benefit, or obtain medical records from medical providers the patient may have seen prior to his or her denied service(s). These interactions can be stressful because the staff member is asking the individual to revisit a matter he or she considered closed. Such discussions can lead to frustration and anxiety, especially if the patient believes the denial may increase his or her financial exposure.
The Fallout Can Escalate Quickly
When patients find out about a claim denial, they tend to see it as an issue created by the hospital, not the insurance company. Over time, if patients receive multiple notifications about denials, it can create the impression that the hospital is improperly handling their information and not protecting the patient’s financial interests. This can lead to a downward spiral where the patient starts to believe the facility struggles with billing, and the individual begins to question the validity of the invoices coming from the organization. The patient then may hesitate before making any payments because of a lack of faith, which can reduce point-of-service or post-service collections.
Disgruntled patients rarely keep their dissatisfaction a secret. Instead, they will share their displeasure with family, friends or members of their community, which can potentially spark harmful word of mouth for that hospital or system. If the friends and family members are having similar experiences, the distrust in a care provider within the community can rapidly escalate, especially if people leave damaging feedback on a health system’s website or social media platforms. Eventually, a patient may become so frustrated that he or she ultimately opts to receive care from another provider. Once an organization loses patient loyalty, it is exceedingly difficult to get back the trust and buy-in of the patient population.
So, how do you know if your denial rate is impacting patient perceptions?
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