Denials Workflow Guide

Denials are inevitable, but how you handle them determines how much revenue you lose. A systematic denial management workflow turns denied claims into paid claims and prevents the same issues from recurring.

The Denial Workflow

1. Identify: Flag denied claims from ERA posting
2. Categorize: Group by denial reason code
3. Investigate: Determine root cause
4. Decide: Correct and resubmit, appeal, or write off
5. Act: Execute the decision within timeframes
6. Track: Monitor resolution and patterns
7. Prevent: Fix upstream issues causing denials

Common Denial Categories

Eligibility Denials

• Member not eligible on date of service
• Coverage terminated
• Managed care enrollment issues

Action: Verify eligibility, bill correct payer, or rebill if eligibility was retroactively updated.

Authorization Denials

• No prior authorization on file
• Service outside authorized dates
• Units exceed authorization

Action: Obtain retro-authorization if possible, or verify authorization and resubmit with correct info.

Coding/Billing Errors

• Invalid procedure code
• Missing/invalid modifier
• Diagnosis code mismatch

Action: Correct and resubmit the claim.

Documentation Denials

• Missing required documentation
• Documentation doesn't support medical necessity

Action: Gather documentation and appeal, or fix documentation process.

Duplicate Claims

• Claim already paid
• Duplicate submission detected

Action: Verify original payment, write off if already paid.

Working Denials Effectively

• Work denials daily: Don't let them pile up
• Prioritize by amount: Focus on high-dollar denials first
• Know your deadlines: Appeal timelines vary by payer
• Document everything: Keep records of investigation and actions
• Track status: Know which denials are pending resolution

Appeals Process

When a denial seems incorrect:

1. Review the denial reason carefully
2. Gather supporting documentation
3. Write clear appeal letter explaining why denial is wrong
4. Submit within appeal deadline (often 60-90 days)
5. Track appeal status and follow up
6. Escalate to second-level appeal if needed

Denial Prevention

The best denial is the one that never happens:

• Verify eligibility before providing services
• Ensure authorizations are in place
• Use claim scrubbing to catch errors
• Train staff on proper documentation
• Analyze denial patterns and address root causes

Key Metrics

• Denial rate: % of claims denied on first submission
• Denial recovery rate: % of denied dollars recovered
• Days to resolution: How long denials sit before resolution
• Write-off rate: % of denials written off
• Denials by reason: Which issues cause most denials

Using Technology

Good denial management software should:

• Auto-flag denials from ERA posting
• Categorize by reason code
• Track status through resolution
• Calculate appeal deadlines
• Report on denial patterns and trends
• Allow one-click resubmission of corrected claims