How to Reduce Denied Claims and Rev Up Your Revenue Cycle
Denied claims don’t just delay payments — they pose a serious threat to your practice’s financial health. According to the American Medical Association, unresolved claims denials, which can result from prior authorization, missing information, or other reasons, represent an average annual loss of $5 million, almost 5% of net patient revenue.1
The good news? A number of tools can help — including those powered by AI. These technologies help improve billing accuracy, streamline workflows and even flag high-risk claims before submission.
By reducing denials, your practice could recover lost revenue and benefit from faster payment cycles, more predictable cash flow and smarter resource allocation. The result? Better forecasting, less administrative burden and more time to focus on patient care.
Read on to learn how to reduce denials at your practice.
Tips for preventing claims denials
1. Help improve accuracy with suggested coding
Coding errors are a common cause of denials. To help improve accuracy during the documentation process, some EHR systems include features like suggested coding.
How it works: The EHR suggests coding based on your documentation and choices made within the EHR system. This includes E/M codes, CPT codes, HCPCS codes, modifiers, diagnosis specificity and global periods. Providers review what the system suggests and can make adjustments as they see fit.
Did you know? A recent study showed that providers improved their coding accuracy with ModMed®, which led to an increase in reimbursements and reduced insurance denial rates for some providers.2
2. Use automation to help prevent claim errors and save time
Automation and AI are two powerful tools that can make a real difference in your practice — especially when it comes to reducing human error and keeping claims flowing smoothly. Practices that don’t leverage these technologies often feel the impact on their bottom line. Those that do, quickly wonder how they ever managed without them.
With that in mind, here are some key features you may want to consider for your practice:
- Automated claims scrubbing and custom scrub rules to help catch common mistakes
- A built-in clearinghouse solution with real-time status updates alerting you to potential issues
- Integration between your EHR and practice management system to connect the clinical, operational and financial aspects of your practice
- AI-powered tools that flag claims likely to be denied before submission
Catch denials before they happen with Denial Assessment
Denial Assessment is an AI-powered feature available in ModMed Practice Management. It evaluates claims after standard scrubbing but before submission — flagging those with a higher likelihood of denial.
How it works:
- After a claim is created, it goes through your usual scrub rules
- Denial Assessment uses AI to analyze the claim further
- If the claim is likely to be denied, it’s flagged for your billing team
This extra layer of protection helps you identify and resolve potential issues proactively.
3. Consider outsourcing medical billing services
For many practices, the ideal billing solution is a hybrid approach that combines technology with experienced human support — and, by the way, that support doesn’t have to be all or nothing.
The right billing partner can tailor their services to fit your needs — whether that means taking over your billing entirely, or handling just a portion of it.
Look for partners that meet with you regularly to review financial reports, discuss trends and KPIs, provide updates, and share feedback to help you manage your business and stay on track.
Did you know? A recent study showed that ModMed helped practices gain efficiencies in claim submissions and analyzing rejections and denials.2
Why claims denial prevention matters
Every denied claim represents a potential loss of revenue that can threaten your practice’s financial health. By reducing denials, you can help improve cash flow and increase financial stability. A proactive approach to claims management can help you:
Improve forecasting and decision-making
Denials can be unpredictable, skewing forecasts and limiting decision-making power. An improved claims process could create a foundation for more reliable forecasting. A realistic outlook can help you design and execute strategies that support operational efficiency, high-quality patient care and ongoing profitability.
Reallocate resources for cost savings and growth
When claims are denied, your team must spend valuable time and energy managing appeals. This process delays payments and drives up administrative costs. Reducing denials allows you to shift resources toward higher-value activities.
Protect patients from unexpected bills
You may not realize it, but denials can dramatically impact the patient experience. Denied claims often result in unexpected charges for patients, damaging trust and creating financial stress. Minimizing denials can help prevent unexpected bills and help retain patient trust.
Finding the best billing and claims tools
Reducing denials starts with better tools and smarter processes. The right billing and claims technology can simplify workflows, reduce errors and help you get paid faster.
Try our calculator to see how much revenue you could recover by improving denial rates with ModMed2 and check out our latest AI-powered solutions.
1 Why private practices need a stronger handle on the revenue cycle, American Medical Association, May 20, 2024.
2 Source: a composite organization based on 10 interviewees and 10 additional customer poll responses from The Total Economic Tmpact™ of ModMed, a Forrester Consulting Total Economic Impact™ study, commissioned by ModMed, March 2024.
This blog is intended for informational purposes only and does not constitute legal or medical advice. Please consult with your legal counsel and other qualified advisors to ensure compliance with applicable laws, regulations and standards.
