Healthcare System Decreased Initial Payment Denials By 26% With GLSS
Illinois
Healthcare
Finance
26%
- The problem: A healthcare system found itself facing a substantial challenge: a staggering $3.4 million in monthly losses due to initial payment denials. These denials disrupted cash flow, increased staff workload, and jeopardized the efficiency of their operation.
- The system turned to Green Belt Training & Certification. Their expertise in Lean Six Sigma provided the structured approach needed to reduce initial payment denials from an average of $3.4 to $2.5 million per month—a 26% improvement saving $900K per month.
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In the fast-paced and challenging healthcare industry, maintaining financial stability is just as crucial as providing high-quality patient care. One healthcare system found itself facing a monumental challenge: a staggering $3.4 million in monthly losses due to initial payment denials.
Payment denials from insurance payors are a common but critical challenge in healthcare. These denials disrupted cash flow, increased staff workload, and jeopardized the efficiency of their operations. For this organization, the sheer volume of denials threatened their ability to allocate resources effectively, straining both their finances and their capacity to provide timely care.
Process improvement was essential to reverse these losses and restore efficiency. Without a unified approach to managing authorizations and referrals, the organization risked falling further behind in meeting operational demands. Recognizing the importance of addressing this issue quickly and effectively, they turned to GLSS Green Belt Training & Certification for guidance.
An in-depth analysis uncovered several factors contributing to the high rate of payment denials:
- Fragmented Ownership: No single department was responsible for overseeing referral processes, resulting in a lack of accountability.
- Disparate Reporting Structures: Referral coordinators (RCs) were scattered across departments, leading to inconsistent practices and workflows.
- Lack of Standardization: Each service line had its approach to managing referrals and authorizations, creating inefficiencies and confusion.
These challenges highlighted the need for cohesive management and standardized practices to prevent denials at the source.
With the expertise provided by GLSS Green Belt Training & Certification, the organization launched a comprehensive initiative to address these root causes. Key solutions included:
- Centralized Referral Team: All RCs were consolidated into a single team, streamlining operations and ensuring consistent oversight.
- Insurance Update Database: A centralized database was established to help the team stay on top of insurance updates and changes.
- Revised Job Requirements: Authorization experience became a mandatory qualification for new hires, ensuring staff had the necessary skills.
- Dedicated Team Manager: A manager with extensive experience in authorizations was hired to lead the team, providing focused leadership and accountability.
- Standardized Processes: Standard work procedures were developed for each service line, ensuring uniformity and reducing errors in managing referrals.
The transformation was both immediate and impactful. The organization experienced a 26% reduction in initial payment denials, dropping from $3.4 to $2.5 million per month, greatly improving its financial outlook. By centralizing referral coordinators and introducing standardized processes, the team achieved a consistent and reliable workflow.
Referral coordinators expressed greater satisfaction with their roles, appreciating the clear structure and enhanced support. The centralized system also fostered collaboration, with team members sharing best practices and learning from one another. Each service line saw improvements in efficiency and fewer denials, creating a ripple effect of positive change throughout the organization.
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This case study underscores the power of GLSS Training & Certification’s innovative instructional design and tailored solutions in driving meaningful results. By addressing the root causes of payment denials, the organization not only achieved financial stability but also fostered a more cohesive and empowered team.
With a foundation of streamlined processes and well-supported staff, the organization is now better positioned for long-term success. As they continue to deliver exceptional patient care, their journey stands as a testament to how GLSS’s expertise can help healthcare organizations.
*We value our clients’ confidentiality. While we’ve changed their names, the results are real.
