Denial Prevention Program

Author’s Corner

In this white paper, Somanathan Nathan, Senior Client Operations Director, emphasizes the substantial financial impact of claim denials on healthcare organizations. With approximately 65% of denials going uncorrected and over 75% being avoidable, the paper underscores the need for an effective denial prevention program. He outlines strategies that include provider education, claims management, and establishing medical necessity, with an emphasis on setting performance goals, implementing quality assurance processes, and leveraging automation for long-term success.

Please click on the video to the right to learn more about the author, hear his insights on this white paper, and learn what motivated him to write about the impact claims denials have on healthcare organizations.

To discuss this white paper in detail, please contact Somanathan using the information provided at the bottom of the page.

Healthcare organizations are losing billions of dollars through denied claims. While some claim denials could lead to significant healthcare revenue declines, the Medical Group Management Association (MGMA) found that approximately 65% of claim denials were never corrected and then re-submitted to payers for reimbursement. More than 75% of claims are denied for reasons that can be avoided by adhering to policies and procedures in which the billing staff can be trained. Ultimately, denial management requires a large amount of time, money, and resources for healthcare organizations to handle by themselves.

An effective program to prevent denials requires a reiterative process that includes the identification of the issue’s root causes and solutions to prevent it from recurring in the future. These procedures can be institutionalized through updates to standard operating procedures and training the staff in these practices.


Importance of Denial Prevention in Healthcare

A healthcare organization can maintain its financial stability by avoiding denials and ensuring it is paid fully for its services.

A healthcare organization can save money by preventing denials in the first place and avoiding the expenditures of the appeals procedure. A healthcare organization can streamline its processes and increase efficiency by avoiding denials.

A healthcare organization can safeguard its reputation and guarantee that patients are getting their required care without needless delays by eliminating denials.

Grasp the Enormity of the Problem

A denial prevention initiative enables you to create a framework of reiterative processes that can reduce the denial rate consistently. To create a framework for an efficient process, one must weigh the problem. Here are three measures that can help you understand the magnitude of the problem:

  • Denial rate
  • The percentage of denied claims with a high dollar value is a percentage of the total number of denied claims, which is a proportional percentage
  • Percentage of claims appealed

Denial Prevention Strategies

In healthcare, provider education and training are critical denial prevention strategies. This involves training providers on coding and billing practices to ensure that they submit claims that meet the payer's requirements.

Claims management is another critical denial prevention strategy. This involves addressing denials and reasons behind a denied claim. It is also important to review applications before submission to ensure they are complete and accurate and address any issues or discrepancies before they result in denial.

Establishing and documenting medical necessity in healthcare is a critical denial prevention strategy. This involves documenting why a particular service or treatment is medically necessary for the patient and ensuring that this information is included in the medical claim.

Healthcare Organizations Aim to Increase Approval Chances

  • Regularly review and update documentation
  • Stay compliant with regulations and guidelines
  • Implement a robust claims management process
  • Establish and document medical necessity
  • Monitor denials and track trends
  • Work with payers and contractors
  • Apply automation and analytics

Recommendations for Improvement

  • Set performance goals and targets for denial management
  • Create trending reports that include:
    • Denied days per admission
    • Denials by service area
    • Denials by physician
  • Identify avoidable and unavoidable denials
  • Implement a quality assurance process to review clinicals sent to payers for the appropriate level of care and completion of clinical information
  • Interface of systems that have authorization information

Measure the Success

Once these recommendations have been implemented, your attention should immediately turn to rejection prevention. Give your team access to automatic reports so they can identify the root of the problems and take precise steps to solve it. You can turn learning into a denial prevention plan by institutionalizing the denial rate measurement, investigating the root reason, and removing it.


Vee Healthtek provides a comprehensive denial management solution that helps businesses reduce the risk of denials. Our revenue cycle management works as a denial prevention program, finding the root cause of denials along with denials management to prevent denials from occurring in the future.

Our RCM platform allows businesses to easily verify customer information, monitor customer accounts, and implement fraud prevention measures. Additionally, we provide detailed analytics and reporting tools to help businesses manage denials and take corrective action.


Meet the Author

Somanathan B. Nathan - Senior Client Operations Director

Somanathan B. Nathan is a Senior Client Operations Director at Vee Healthtek. Somanathan heads Vee Healthtek’s Salem unit, which consists of 300 associates, 14 team leaders, and four managers. He is involved in onsite and offshore transition and works on projects involving pre-registration, payment posting, credit balance resolution, and accounts receivables for hospitals and physicians.