TechTarget Inc: Revenue Cycle Leaders Spend the Most Time on Denials Management

By Victoria Bailey  |  April 20, 2023


Over 75 percent of revenue cycle leaders said denials management—a costly process that can adversely impact patient experience—was the most time-consuming task for their organization.

Denials management and prior authorization are the most time-consuming revenue cycle management tasks for healthcare financial leaders, a survey commissioned by the healthcare operations company AKASA found.

The survey was conducted through the Healthcare Financial Management Association’s (HFMA) Pulse Survey program between July 8, 2022, and August 2, 2022. The data reflects responses from 556 chief financial officers and revenue cycle leaders at hospitals and health systems across the country.

Respondents were asked about the most time-consuming revenue cycle tasks for their organization. They could select up to five revenue cycle tasks from a list of 15.

Dig Deeper

Over three-quarters (76 percent) of respondents said denials management was their organization’s most time-consuming task. In addition to taking up providers’ time, denials management can be costly and adversely impact patient experience.

According to AKASA, addressing the root causes of denials can help health systems reduce denials and better manage them when they occur.

Denial rates have increased in recent years, impacting revenue performance and the quality and accessibility of patient care. While the majority of claim denials are typically avoidable and can be prevented by hospital staff, some denials arise from prior authorization issues that providers cannot help.

Prior authorization alone creates its own set of problems for financial leaders, with 60 percent of respondents reporting that the process is a time-consuming revenue cycle task.

The American Medical Association (AMA) found that 88 percent of physicians described the burden of prior authorization as high or extremely high. Additionally, practices complete 45 prior authorizations per physician per week and dedicate almost two business days each week to the process.

After denials management and prior authorization, insurance follow-up was the next most time-consuming task, with 58.6 percent of respondents choosing the process.

Around 26 percent of revenue cycle leaders said that eligibility and medical necessity checks, patient cost estimation and price transparency, and underpayments were time-consuming tasks. Respondents also mentioned coding (23.6 percent), credit balances (22.5 percent), claim edits (19.1 percent), and registration (16.6 percent) as lengthy tasks.

“These results emphasize that there is an immense opportunity for revenue cycle leaders to reduce the time their teams spend on manual tasks,” Amy Raymond, vice president of revenue cycle operations at AKASA, said in the press release.

One path to achieving this goal is automation. A past survey commissioned by AKASA found that using automation for revenue cycle operations could lower health systems’ cost-to-collect by 0.25 percent.

Additionally, a report from the Council for Affordable Quality Healthcare, Inc. (CAQH) revealed that automating claims management processes could save healthcare providers nearly $25 billion annually.