Claim denial rates aren't improving, but AI could help

Endless cycle of claim denials

Providers are seemingly stuck in a cycle of rising claim denial rates and data errors, Experian Health stated. Once again, the top reasons for claim denials, in order of most denials, are missing or inaccurate claim data, prior authorizations, incomplete or incorrect patient registration data, code inaccuracy and services not covered.

However, data errors seem to be more common now, with the percentage of providers citing missing or inaccurate claim data and incomplete or incorrect patient registration data increasing slightly compared to last year's findings. What's more, over half of respondents to this year's survey said claim errors are increasing.

Submitting clean claims is more challenging than a year ago, according to 68% of providers. The survey indicated that providers are facing longer times for eligibility re-runs and fewer staff to handle claims and denials management.

Still, 82% of providers in the survey said reducing denials is a priority for their organizations. Technology investments are the most likely solution to address rising claim denial rates, the survey suggested.

State of claims management technology

Providers are using multiple IT systems to manage denials. For example, 81% of respondents reported using more than one system just for check-in alone, suggesting inefficiencies and redundancies in intake workflows, Experian Health said.

With patient registration data errors being a top reason for claim denials, consolidating systems or implementing smarter systems may help to finally cut denial rates.

Some providers are already evaluating their technology stacks to address denials. The survey found that 41% of respondents upgraded or replaced their claims management technology in the past year. Yet, only 56% of respondents said their current claims technology is sufficient to address revenue cycle demands -- significantly less than the 77% of respondents in last year's survey, the survey highlighted.

Over half of respondents (55%) are willing to rip and replace their existing claims management platform if it would lead to more return on investment.

These technology investments are in the pipeline, the survey indicated. About 59% of respondents said they plan to invest in claims processing and/or denial reduction technology within the next six months.

The potential for AI to reduce denial rates

Artificial intelligence (AI) may be the key to technology challenges, the survey indicated. About 67% of respondents said they believe AI can improve the claims process. However, just 14% reported already using AI to help reduce denials.

Providers are not totally confident in their understanding of AI and its application to revenue cycle management. Only 62% of respondents were extremely or very knowledgeable of the differences between AI, automation and machine learning, the survey showed.

Experian Health also reported that providers are concerned about the unproven accuracy of AI solutions and whether they are HIPAA compliant. Other concerns that have tempered AI enthusiasm include "daunting" training on AI solutions and skepticism of AI's "understanding" of payer-specific rules. The latter reason specifically ties into CMS' latest focus on reducing healthcare fraud, waste and abuse, including improper payments,

However, the small group of providers who are currently using AI for denials said the technology is generating results. In the survey, 69% reported that their AI solutions reduced denials and/or increased the success of resubmissions.

Most of these providers are also using a combination of in-house and vendor solutions to use AI for denials management.

Experian Health said the coming year could be a "turning point for claims management" as technology adoption in this space continues to increase, amplified by AI.

Jacqueline LaPointe is a graduate of Brandeis University and King's College London. She has been writing about healthcare finance and revenue cycle management since 2016.