What are the two most common practice challenges that healthcare providers face? Denied claims and late reimbursements. In fact, denial rates continue to rise, with providers seeing rejection rates as high as 10 to 15%.
This issue creates barriers to collecting payment and increases costs as organizations spend more money on appealing and resubmitting claims. Most practices will struggle to survive if they are denied payment or if payments are delayed.
Some experts will say that denials are unavoidable in clinical practice, and you just need to accept them, but that’s a big misconception.
In fact, there is something you can do about it right now: stopping these issues before they even start. Providers can achieve this by implementing a thorough claim review process before submission.
By introducing medical claims scrubbing into your workflow, you can reduce errors, improve accuracy, and ensure compliance, all while maximizing revenue.
RELATED ARTICLE: 5 Things You Need to Know About Claims Scrubbing
Why Reviewing Claims Matters
For healthcare providers, submitting clean claims is essential for uninterrupted cash flow. Errors in medical claims often lead to denials, delayed reimbursements, or even a complete rejection. How costly can this be?
According to Chief Healthcare Executive, systems and post-acute care providers paid more than $25.7 billion in claims adjudication in 2023. These stats show that no matter your practice size, claim battles impact the revenue cycle and increase your administrative workload.
Correctly reviewing claims ensures:
- Reduced Denials: Errors such as inaccurate ICD-10 or CPT codes are among the leading causes of claim denials. Reviewing claims beforehand can help catch these issues early.
- Improved Accuracy: Consistent claim reviews improve coding precision, ensuring compliance with payer requirements.
- Timely Reimbursements: Clean claims are processed faster by insurance companies, reducing revenue delays.
With so much at stake, investing in an efficient claim review process, like claim scrubbing, becomes critical for healthcare providers aiming to streamline operations, avoid adjudication battles, and boost profitability.
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What is Medical Claims Scrubbing?
The medical claims scrubbing process includes reviewing medical claims to ensure accuracy, compliance, and completeness before submission to payers. As a result, practices increase the chances that each claim is paid out promptly and that the revenue cycle management (RCM) process is optimized.
Claim scrubbing vs. Manual Review
During claim scrubbing, software systems called “claim scrubbers” are used. These systems use algorithms to examine the claims and flag any potential issues that may lead to claim denials, rejections, or payment delays.
Next, the information is transmitted electronically to a health insurer or other third-party payer for processing and payment. Meanwhile, a manual claim review is when a provider uses special paper claim forms, which are typically sent to the payer through the mail. This process is considered outdated, time-consuming, and prone to errors.
Unlike manual reviews that rely on human oversight, advanced claim scrubbing is proactive and leverages technology to check for common claim errors, including:
- Incorrect or mismatched CPT, ICD-10, or HCPCS codes
- Missing important patient or service details
- Misusing modifiers or overusing modifier 22
- Non-compliance with insurance payer rules
- Downcoding or upcoding
By catching and correcting these issues early, healthcare providers can gain control over their cash flow and submit optimized claims, reducing denials and enhancing efficiency.
How Does Medical Claims Scrubbing Work?
Medical claims scrubbing follows a structured process to ensure all claims are error free before going to the payer. We break it down step by step below:
Step 1. Data Input
Patient and service details are added to your billing system. This includes demographics, diagnosis codes (ICD-10), procedure codes (CPT), and other relevant information.
Step 2. Validation
Claim scrubbing tools validate what you enter, comparing it against coding guidelines, compliance rules, and payer-specific requirements. For example, this is the point when a patient’s insurance eligibility is determined.
Step 3. Flagging and Reporting
The system identifies common errors, such as mismatched codes, missing modifiers, or incomplete patient information. This information is then reported in the system.
Step 4. Resolution
Billing teams review the flagged errors and correct them based on the feedback provided by the scrubbing tool.
Step 5. Compliance Check
The claim undergoes one final pass to ensure adherence to payer regulations and coding compliance standards.
Step 6. Submission
Once the claim is error free, it’s submitted to the insurance payer or clearinghouse for processing.
Some important process terms to know:
- Explanation of Benefits (EOB) is a statement the insurance company sends after processing a claim that lists the total charges (amount billed), non-covered charges, the amount paid to the provider, and any co-pays and deductibles the patient pays.
- Superbill is a breakdown of services provided to a patient, with the time of services recorded. This document lets you know what goes into the claim.
- Claims Editing is a process that identifies claim errors and then puts the correct information on a form before sending it to an insurance provider.
- Charge Review is when healthcare practices compare their rates to the standard rates created by health insurers like Medicare or Medicaid.
Benefits of Medical Claims Scrubbing
Claim scrubbing goes beyond error correction. It’s a thorough approach that equips providers with many key benefits. Here’s how the medical claims scrubbing process can help your practice get the money you’ve earned faster:
Lower Claim Denials and Improved Coding Compliance
Claim scrubbing minimizes the chances of denial by catching errors such as incorrect ICD-10 or CPT codes or upcoding. This translates directly into cost savings by avoiding resubmissions.
Claim scrubbing ensures all claims are compliant with payer and regulatory requirements, reducing the risk of audits or penalties. For example, CollaborateMD is practice management software that can be integrated with electronic health records to improve workflows. This solution offers several features, including:
- Claims scrubbing—a tool that allows you to submit cleaner claims by reducing rejections with built-in billing and coding edits. This process takes considerably less time than manual review, so you can submit claims faster and get paid faster.
- Claim generation and submission—a feature ensuring that claims are created accurately, compliant with insurance regulations, and submitted promptly—reducing non-compliance issues.
Faster Payouts and Better Accuracy
Clean claims submitted on the first attempt get processed faster by insurance companies, leading to quicker reimbursements. Claim scrubbing tools also standardize data accuracy, minimizing discrepancies that can impact patient records and billing processes.
This feature gives an added layer of accuracy, protects your practice, and builds confidence in your billing processes.
Reduced Workload and Improved Revenue Capture
Automating the claim review process saves billing teams time, allowing staff to focus on patients. For example, the CollaborateMD practice management solution offers a Real-Time Claim Submission feature that lets your practice:
- Know within seconds if claims have been accepted and are on their way to the payer
- Quickly identify and correct rejected claims to receive accurate and timely insurance payments
Ensuring claims are accurate and complete reduces your staff’s workload and lets you capture the full revenue you are entitled to for the services provided.
Best Practices for Medical Claims Scrubbing
To make the most of medical claims scrubbing and maximize revenue, providers should adopt these six best practices:
1. Find the Right Tools
Choose a reliable claim scrubbing tool that integrates seamlessly with your medical billing software. Look for tools that offer real-time feedback and can accommodate payer-specific requirements.
2. Keep Staff in the Know
Equip your billing and coding team with consistent training on using the claim scrubbing software, coding standards, and payer regulations. Also, confirm basic information like addresses, phone numbers, and insurance plans at every patient encounter. Outdated information can trigger denials.
3. Focus on ICD-10 and CPT Code Accuracy
Ensure coders stay up to date with changing guidelines to prevent errors. Correctly aligning diagnosis and procedure codes is critical for compliance and reimbursement.
4. Perform Regular Audits
Periodically audit a sample of submitted claims to ensure your scrubbing process is effective and efficient. Use the findings to refine workflows and address recurring issues. This process is also beneficial as it can flag the issues costing your practice’s bottom line.
5. Make Payers Your Ally
Develop open lines of communication with insurance payers to stay informed about their processes and specific requirements to reduce claim rejection rates.
For example, some payers are using predictive analytics such as AI to identify potential waste, fraud, and abuse in the claims processing system. Open communication allows providers to learn about this technology and adapt their practices accordingly.
6. Keep an Eye on Your Calendar and Leverage Metrics
Failure to file claims according to the specified payer timelines makes a claim an easy target for denial. Regular reviews of timely filing and pending claims should include checking submission deadlines to avoid these issues.
Track metrics like first-pass acceptance rates and denial rates. This data offers insights into the performance of your claim scrubbing process and highlights opportunities for improvement.
Take the Next Step Toward Error-Free Medical Billing
Medical claims scrubbing gives healthcare providers a powerful tool to reduce errors, improve accuracy, and ensure compliance.
By embracing advanced practice management software and partnering with proficient billing teams, your practice can ensure timely reimbursement and maximize revenue.
Want to take your medical billing accuracy to the next level? Contact CollaborateMD to overcome cash flow problems and improve your financial health.
