How often do you receive prompt payments for your services without any rejections? Payers deny most medical claims due to billing errors, such as incomplete or missing patient information, mismatched coding, lack of pre-authorization, and missed deadlines. The problem is so severe that according to Premier’s voluntary national survey of 2023, insurance companies, on average, initially deny nearly 15% of all submitted claims.
The numbers are even higher for Medicare and Medicaid claims, reaching 15.7% and 16.7% respectively. So, how can you avoid payment delays and additional administrative burdens? The answer is simple – by improving your clean claim rate. Let’s explore what a clean claim rate is and how your practice can achieve it.
What is Considered a Clean Claim?
A clean claim is a key performance metric of an efficient revenue cycle. In simple words, a clean claim is a medical bill without any error or missing information. Most importantly, it is submitted within a payer’s specified timeframe. In summary, medical claims that meet the following criteria can be classified as clean claims.
- They contain accurate patient information and insurance details.
- They include all the supporting documentation and justify high-cost services.
- They comply with all payer-specific and healthcare regulations, including coding and billing requirements.
Now you know what a clean claim is, but if you are a medical biller, you might have encountered the term clean claim rate. Let’s take a moment to clarify that as well.
In healthcare, a clean claim rate refers to the percentage of accurate claims processed by payers on initial submission. In other words, it indicates the efficiency of a healthcare provider’s claim submission process and how they meet different insurance companies’ requirements. Therefore, most practices aim for a high clean claim rate because it leads to faster reimbursements and improved cash flows.
Clean Claim Rate Calculation
To assess your practice’s current situation, divide the number of accurate claims that were processed successfully on the first try by the total number of claims submitted to various payers. Then, multiply the result by 100 to calculate the clean claim rate for your healthcare organization. The formula for this key revenue cycle metric is:
Clean Claim Rate = (Total Number of Clean Claims/Total Number of Submitted Claims) x 100
The calculation is quite simple. However, it heavily depends on accurate data. Therefore, healthcare providers should maintain proper information about claim submissions, rejections, and denials. Let’s consider an example.
Suppose you run a pediatric practice and have submitted one thousand claims to different insurance companies. Out of that number, only 650 claims were error-free, leading to quick reimbursements. Here is how you can evaluate your claim submission process.
Clean claim rate = (650/1000) x 100 = 65%
This result indicates that payers accepted and processed only 65% of your claims while rejecting or denying the other 35% of your submissions. Hence, you need to improve your claim submission process.
Impact of Clean Claims on Healthcare Practices
Clean claims have a direct impact on healthcare practices, influencing both their financial and operational efficiency. Healthcare organizations with high clean claim rates benefit from reduced administrative burdens as they don’t have to invest extra resources into appeals and rework. Here is a detailed breakdown of how clean claims positively affect medical practices.
Quick Reimbursements
Both public and private insurance companies handle clean claims more efficiently. These claims include accurate and complete information, making it easier for payers to review and process them. As a result, healthcare organizations with high clean claim rates get paid more quickly than others.
Reduced Administrative Burden & Costs
A higher clean claim rate also means fewer rejected or denied claims. Therefore, healthcare practices with efficient claim submission processes spend less time and resources on corrections and resubmissions. As a result, their staff can focus on other important tasks, such as providing quality patient care.
Higher Revenue
Clean claims also result in fewer write-offs from payers. Practices that submit accurate claims receive complete payments for their services without any deductions or delays. As a result, they enjoy more consistent revenue than those with low clean claim rates.
HFMA Clean Claim Rate Benchmark
We have discussed how high clean claim rates are important for healthcare practices. But how high should your ‘high’ clean claim rate be? And how do you know that you are truly excelling in the industry?
Fortunately, industry experts have defined an ideal clean claim rate (90%) so you can evaluate and improve your performance. Some even recommend a higher number. The Healthcare Financial Management Association (HFMA) suggests that providers achieve a 98% clean claim rate for prompt payments.
Realistically, anything above 80% is quite acceptable. However, it is better to aim for a 90% clean claim rate to maintain your accuracy and the quality of your operations. This standard rate indicates that a medical practice has effective processes for revenue cycle management. On the other hand, anything below 80% is less than ideal and might negatively impact your cash flow.
Best Practices to Optimize Clean Claim Rate
Industry experts may have set a challenging benchmark for clean claim rates, but it is not impossible to achieve it. You can follow these practices to increase the efficiency of your submission process and reduce claim denials.
Use Accurate Patient Information
Before submitting any claims, verify all patient information, such as demographics, medical history, and insurance details. Update your patients’ records frequently to reduce billing errors and claim denials.
Verify Insurance Benefits & Coverage
Next, verify your patient’s insurance benefits and coverage. This step will help you identify which services are covered in their insurance plan and which services require prior approval so you can avoid claim processing and reimbursement issues.
Check Pre-Authorization Requirements
Obtain all essential prior approvals and referrals from insurance companies before providing any service. Also, don’t forget to maintain and include thorough records of authorization approvals to avoid payment delays.
Assign Proper Codes
Use accurate ICD-10 and CPT/HCPCS codes to accurately describe a patient’s diagnosis and the performed service or procedure. Regularly update your coding database and team’s knowledge to avoid miscoding.
Include Supporting Documents
Record all provided services and document their medical necessity for a patient. Your documentation should be consistent with the claim details to avoid claim denials.
Claim Scrubbing Software
Your claims should be error-free. Use claim scrubbing software to detect common errors. This software will also help you meet all the regulatory and payer-specific requirements and ensure that all fields are accurately filled out.
Monitor & Report Denied Claims
Review previously denied or rejected claims to identify common mistakes and patterns. Address all issues and establish an effective denial management process to recover your lost revenue.
Submit Claims on Time
Timely submissions are essential for achieving a high clean claim rate. Therefore, identify the deadlines of different payers and file your claims within their specified timeframe to avoid claim denials.
Train Your Staff
Lastly, educate your staff on the best billing and coding practices to improve clean claim rates. They should be familiar with different insurance policies and updates in the coding guidelines for accurate claim submissions.
How MediBill MD Can Help You Maximize Clean Claim Rates?
Are you struggling with low clean claim rates? Let MediBill MD guide you through every step. We can maximize your clean claim rates through our customized medical billing services. Our strategic billing approach is supported by a combination of an experienced team and advanced tools, helping you achieve 98% clean claim rates.
We handle every aspect of your revenue cycle with special attention, from pre-registration to payment posting and patient billing. In addition to streamlining your billing process, our team conducts thorough reviews to identify and correct recurring billing errors to avoid claim denials. We also offer dedicated support to address your issues. In short, we can help you improve your financial efficiency and operational performance.
