How to Increase the Clean Claim Rate and Prevent Denials

In the world of healthcare revenue cycle management, the term "clean claim rate" plays a huge role in determining the financial health of a practice or hospital. A high clean claim rate is synonymous with operational efficiency and financial stability, while a low rate indicates potential issues that can lead to revenue losses and increased operational costs.

Today we will delve into what a clean claim rate is, why it’s important, and how healthcare providers can increase it, supported by practical examples.

What is a Clean Claim Rate?

The clean claim rate is a metric in health insurance that shows how many of all insurance claims sent out, insurers approved and paid immediately, without returning them for revision or clarification.

Imagine a healthcare facility sending many claims to an insurance company for the services they provide to patients. Each claim must contain accurate information about the patient, services, and other details. If the insurer receives a claim and approves and pays it right away without asking any additional questions or asking for corrections, it is called a clean claim.

The clean claim rate is the percentage of such "clean" claims out of the total number of claims sent. The higher the percentage, the better.

The clean claim rate is calculated by dividing the number of claims accepted on the first submission by the total number of claims submitted, then multiplying by 100 to get a percentage.

Example:

• A medical centre has sent 100 claims for payment in a month.
• The insurance company approved and paid 90 of them with no questions asked and no chargebacks.
• This means the medical centre has a clean claim rate of 90%.

Healthcare organizations desire a high clean claim rate as it implies that the claims are accurate, complete, and compliant with payer requirements.

Importance of a High Clean Claim Rate

Maintaining a high clean claim rate is essential for several reasons. Firstly, it ensures financial health. Efficient claims processing means healthcare providers get paid promptly, which is critical for keeping cash flow steady and maintaining financial stability.

In addition, a high clean claim rate helps reduce administrative costs. When fewer claims are rejected or denied, less time and fewer resources are needed for reworking and resubmitting them. This leads to significant savings on administrative expenses.

Another important benefit is improved compliance. A high clean claim rate usually indicates that the provider is adhering to regulatory and payer requirements, which helps reduce the risk of audits and penalties.

Furthermore, a high rate enhances the patient experience by making claim processing more efficient. This results in fewer billing issues, which can boost patients' trust in their healthcare provider.

Factors Affecting the Clean Claim Rate

Several factors can influence the clean claim rate, including:

1. Data Accuracy. Errors in patient information, coding, and billing details can lead to claim rejections.
2. Payer Requirements. Each insurance payer has specific requirements for claim submissions. Failure to comply with these can result in rejections.
3. Claim Documentation. Incomplete or inadequate documentation can cause claims to be denied or delayed.
4. Coding Issues. Incorrect or outdated medical codes can result in claim rejections or a higher claim denial rate.
5. Technical Issues. Problems with electronic health records (EHR) systems or claims submission software can affect the clean claim rate.

Strategies to Increase the Clean Claim Rate

To optimise the clean claim rate, healthcare providers can implement several strategies. Let’s consider some of them.

Regular training and education

Ensure that staff knows about the latest coding standards, payer requirements, and regulatory changes. Regular training sessions can help keep the team updated and proficient in accurate claim submission.

Invest in technology

Advanced medical billing and coding software can automate many aspects of the claims submission process and reduce the likelihood of human error. Software that integrates with EHR systems streamlines data entry and ensures consistency across records and industry standards.

Comprehensive documentation

Ensuring that all patient interactions and treatments are thoroughly documented can support accurate claims. This includes capturing detailed information on diagnoses, procedures, and any supporting documentation required by payers.

Electronic patient data reduces the risk of losing important details for successful claim submission. Cloud-based practice management software can not only save valuable data and secure it but also automate the claim-filling process.

Quality control measures

Regularly auditing a sample of submitted claims can help identify trends in errors and areas for improvement. Implement quality control measures, such as peer reviews or checklists, to ensure that claims are accurate before submission.

Patient information verification

Keep patient information accurate and up-to-date at the time of service to prevent many common errors. This includes verifying insurance details, contact information, and any relevant patient history. Use automatic intake forms and notes to operate with real-time and updated patient information and avoid mistakes.

Monitoring and reporting

Regularly monitoring the clean claim rate and other relevant KPIs can help identify areas for improvement. Detailed reporting provides insights into trends and the effectiveness of implemented strategies.

Examples of Improving the Clean Claim Rate

Example 1: Technology integration in a private clinic

A private clinic struggled with a low clean claim rate due to outdated claims submission processes and software. By integrating a modern billing system that automated many aspects of the claims process and interfaced seamlessly with their EHR system, the clinic was able to streamline data entry and reduce errors.

The new system also included pre-submission scrubbing tools that identified errors before claims were submitted. This investment resulted in a 20% increase in the clean claim rate, reduced administrative costs, and improved cash flow.

Example 2: Outsourcing for a small practice

A small medical practice with limited resources found it challenging to maintain a high clean claim rate due to a lack of specialised staff. By outsourcing their claims management to a third-party billing service, they gained access to expert coders and advanced technology.

This move significantly improved their clean claim rate, reducing it from 70% to 90% within a few months. The practice benefited from timely payments and reduced administrative burden, allowing them to focus more on patient care.

The Clean Claim Rate Benchmark

Industry benchmarks for CCR can vary, but a common target for healthcare providers is to achieve a CCR of 90% or higher. This means that 90% or more of the claims submitted are processed successfully on the first submission.

Insurance companies may have their own CCR benchmarks that providers are expected to meet to maintain good relationships and avoid penalties. Payers often monitor CCR closely as part of their assessment of provider performance.

Achieving a high CCR is crucial for optimising RCM. It helps healthcare providers receive timely reimbursement for services rendered, which in turn supports financial stability and operational efficiency.

Summing Up

Getting paid accurately and on time is crucial for hospitals and clinics. A high clean claim rate, which means claims are submitted correctly the first time, helps with this. Here's how healthcare providers can boost their clean claim rate:

Train staff regularly: make sure everyone involved in billing understands the latest rules and codes.

Invest in technology: use software to catch errors before claims are sent.

Double-check everything: this includes patient information, service codes, and medical records.

Communicate clearly: talk to patients about their insurance beforehand to avoid surprises.

Get feedback: regularly review denied claims to see where improvements can be made.

By following these steps, you can get paid faster, spend less time on paperwork, and create a smoother experience for patients.

Read our blog to get more information on healthcare metrics and revenue management.