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what is denial management

What Is Denial Management? A Guide For Healthcare Providers

Healthcare facilities are losing billions of dollars in terms of ineffective medical billing procedures. If you are a provider, then there is a chance that you may face 5% to 10% denial rates. But this doesn’t seem concerning. Let me tell you that if a big healthcare facility submits $3 trillion worth of claims in a year, then a 5% denial rate makes up to $150 billion. This fact should be enough to open your eyes to how big this mismanagement can become. However, do you know what is denial management?

You might be scared of how much you may lose if claims are not submitted properly. So, to give you relief, we are here to discuss a technique that protects your facility from losing revenue due to useless claims. Conducting denial management is the only way you can get out of the crisis.

So today, we will dive deep into denial management and how it impacts your revenue collection efforts. You will know everything about this trick; stay tuned until the end.

What Is Denial Management?

person checking documents

Denial management is simply an action plan that, if implemented, saves your claim from rejection. It enables you to use accurate billing codes, submit claims as required by the insurance providers, and track their status. This step-by-step process covers the entire claim system of your facility, which in turn keeps your revenue collection in the chain.

Not only does it provide a way for error-free claim submission, but it also paves the way for successful future claims. Overall, this strategy handles your current claims to be approved quickly, keeps an eye on paid and unpaid bills, takes action regarding delayed responses, and resolves payer objections. When all these tasks are done on a regular basis, you will recover revenue that you might lose due to carelessness.

Common Types Of Claim Denials

As each claim that is denied has a specific reason, knowing common problems that lead to this revenue loss is essential for healthcare providers. When we look at the modern RCM processes, the following are the general denial objections:

Incomplete Or Inaccurate Information

When you submit a claim without attaching the required patient documents, it can be rejected straightforwardly. It is important to know the insurance payer’s requirements so that you can provide supporting documents.

Non-Covered Services

Sometimes, healthcare staff send claims for medical services that are not covered by the patient insurance package. Insurance companies reject claims for services other than coverage. This may also include asking for reimbursement for unnecessary medical treatments.

Have a Look at Detailed Guide on Prevention

Lack Of Preauthorization

Preauthorization refers to asking patients about their insurance plans and contacting respective payers to ensure they are eligible for the insurance. This step is conducted at the time of patient scheduling or during the visit. Not paying attention to this step may cause trouble later on during the claim process because some insurance payers have strict rules over granting healthcare providers permission to treat a patient.

Timely Filing

Many times, insurance payers provide a timeline for when you must submit the claim. Late filing of claims after the deadline leads to rapid claim denial.

Provider Error

This may be the most common denial reason as there is a high possibility of manual errors in the claim. This includes wrong codes or billing inaccuracies that result in straightforward rejection.

The IMMP Process

people finding out a reason

When we study about what is denial management, an abbreviation IMMP is often discussed. This is a strategic way to manage claims by utilizing Identify, Manage, Monitor, and prevent goals. Let’s learn about each in detail.


First of all, the root cause of the claim denials must be known. Without it, you won’t be able to create a plan to resolve the issues. When you receive a concerning rise in claim denials, it is essential to understand the payer’s reasons for rejecting your claims. This interpretation sets the foundation of denial management.


Once you have a list of common reasons your claims are being rejected, rush towards solving the issue as soon as possible. Thoroughly dive into the issue, utilize your staff’s skills and facility’s tools and resubmit the claim. This allows you to secure ample revenue before it gets lost in the hands of insurance payers.


When you work on numerous claims in a day, it is crucial to keep detailed records of denials and arrange them according to date, type, amount, reason, and resolution. This will help you avoid using the same approach to claims, and thus, mistakes can be identified to be focused on the future. You should also conduct training for the denial management team as well to let them learn modern claim approval techniques.


While your current claims are gone for review, you must take measures to prevent future denials to save your efforts. For prevention, you must stimulate your teams to avoid identified errors. If you get a rejection again, summon the responsible staff and ask for an explanation. Make sure your staff, tools, and strategies are up-to-date so that no oversights are left behind that can cause denials for you again.

Proven Denial Management Tips

3 people talking to prevent claim denial

You now have sufficient knowledge about what is denial management, why it happens and what is the common prevention procedure. Here, we have mentioned some of the management tips that you can follow to minimize the risk of denials.

Automated Claim Scrubbing

This is a life-saver tip for healthcare providers. Using automated claim scrubbing software identifies potential application issues early on. This software enables you to submit a perfect claim that will be accepted.

Real-Time Eligibility Verification

There are some eligibility verification tools that help healthcare providers ensure patient insurance eligibility. These tools will help you confirm their insurance coverages so that you know what services to file claims for.

Prompt Follow-Ups

This is a must-step we emphasize when talking about denial management. Respond promptly to submitted claims. Closely review their status, whether approved or not, identify denial reasons, resolve them ASAP, and resubmit. This immediate response will make your denial management efficient and reduce the chances of rejections.

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    Clear Communication With Payers

    Keeping close contact with insurance payers is also a good practice. Maintain a friendly business relationship with them to clarify policy guidelines, ask for denial issues, and make a prompt resolution after knowing their objections.

    Continuous Staff Training

    Sometimes, your denial management staff becomes a cause of errors in claims. So you must conduct updated training of your staff. Make them learn new claim filing techniques, how to use updated software, and top denial reports as well to avoid mistakes. For this, you should host weekly and monthly sessions in your healthcare facility.

    A Comprehensive Approach

    The topic “What is denial management” is a wide niche to discuss because of different healthcare departments. But the issues and management are the same among all. If you have a new healthcare facility or you are a current provider facing a significant number of denials, then this guide is for you. 

    Overall, maintaining a SMART strategy, updating it regularly, and following all the steps are crucial for efficient denial management. The best practice here is to use automation to minimize errors as much as possible.

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