In the interconnected, complex world of healthcare administration, claim denials are a significant challenge, effecting operational efficiency and financial outcomes. The journey from contract ingestion to denial prevention is filled with complexities that cannot be properly handled with manual systems.
This blog delves into this challenge and highlights how Felix Solutions, with its AI-powered Contract Ingestion and Payment Integrity solutions, is streamline processes and revolutionizing contract management to minimize claim denials.
Understanding the Challenge
The task of managing contracts with payors is a daunting one for healthcare providers owing to the complexity of contracts, ever-changing business rules, and time constraints. Without meticulous review, translation, and constant updates to align with payor rules, claim denials are inevitable.
Infact, denial rates have been on the rise, increasing more than 20 percent over the past five years for hospitals, with the average claims denial rate touching 10 percent or more. A poll by the Medical Group Management Association (MGMA) reported an average increase in denials of 17 percent in 2021 alone.
According to a 2020 Index report, 11.1% of claims were denied upon initial submission while the Industry averages show that almost 20 percent of all claims are denied, and around 60 percent of returned claims are never resubmitted. Out of $3 trillion in total claims submitted by healthcare organizations, $262 billion were denied, translating to an average of nearly $5 million in denials per provider, which is about 5 percent of net patient revenue.
As they are costly to rectify, denied claims drain billions of dollars every year and cause sizeable revenue leakage to healthcare systems across the United States. The cost to rework or appeal denials averages $25 per claim for practices and a shocking $181 per claim for hospitals.
The astonishing part about these statistics is that 90% of the denials are preventable, according to The Advisory Board Company. According to recent market data, a foolproof payment integrity system can save 10-20% of healthcare costs by reducing claims denials.
AI’s Role In Contract Management & Claim Denials
This is where the role of AI comes in…Artificial Intelligence algorithms play a pivotal role in revolutionizing contract management and claim denials within the healthcare sector.
By automating the analysis of complex contractual documents, identifying risks, and providing real-time alerts for critical milestones, artificial intelligence contributes to enhanced efficiency in contract management. It streamlines processes, ensuring organizations remain compliant and proactive in meeting contractual obligations.
Felix’s Contract Manager uses AI and ML technologies to automate the process, lowering the risk of errors, improving contract management, and providing a comprehensive view of contract terms. A centralized contract repository that’s easily accessible ensures efficient storage, organization, and retrieval, leading to optimized workflows and automated processes.
In the realm of claim denials, AI leverages predictive analytics to identify patterns in historical data, enabling healthcare providers to address potential issues before claims submission. Automated claims processing, powered by AI, minimizes errors and accelerates workflows while Natural Language Processing (NLP) aids in understanding unstructured data, such as medical documentation, and reduces denials based on incomplete or unclear information. Additionally, AI facilitates root cause analysis for denials and contributes to fraud detection through anomaly detection, thereby optimizing workflows and improving the overall efficiency of healthcare operations.
The Felix PI – Payment Integrity & Risk Adjustment Solution is a comprehensive platform that combines advanced analytics and machine learning to optimize payment accuracy and risk-adjustable revenues. By analyzing vast volumes of data and identifying potential issues, our predictive intelligence solution prevents payment errors, reduces fraud, and enhances risk adjustment strategies, which result in significant cost savings and improved financial outcomes.
The Felix software processes EOB pages in 2-3 seconds, enabling the review of millions of claims every day! With an accuracy rate of up to 65%, which is considerably higher than average industry standards, our solutions help healthcare providers and insurers make informed decisions, improve operational efficiency, and drive better patient outcomes, thus enabling them to stay ahead of the competition.
Conclusion
Felix Solutions goes beyond mere contract ingestion, extending its prowess into preventing claim denials through innovative predictive intelligence solutions. The transformative impact on operational efficiency, cost reduction, and revenue enhancement positions Felix as a leader in the healthcare contract management landscape.
Empower your healthcare organization with Felix Solutions to transform your contract management system and prevent claim denials. Visit Felix Solutions to explore how AI can be your ally in enhancing operational efficiency and maximizing revenue. For more info, please write to hello@felixsolutions.ai