Maximizing Reimbursement for Clinical Services: The Critical Role of Automated Denial Management and Strategic Appeals in Pharmacy Medical Billing

Pharmacies are increasingly offering patients more clinical services and specialty pharmacy options to address consumer demand for more convenient access to healthcare services and boost financial performance.

However, the traditional pharmacy billing pathway does not meet the increased complexity of billing and reimbursements for clinical services. To maximize reimbursement, more sophisticated medical billing processes, support systems, and services are necessitated.

The Hard Truth About Denials and Appeals

Payor edits and guidelines are challenging to understand, especially with varying and constantly changing requirements.

Denial patterns vary among payors and are influenced by payor policy updates, provider network status, and changes in payor and service mix. Despite best efforts, some denials are unavoidable, and not all known issues can be addressed upfront. A robust, strategic appeals process is crucial here.

Regarding appeals, more than a single appeal attempt is often required. This process increases the back-end burden of appeals, as it can take an individual an average of 20-30 minutes to acquire prior authorization manually. The good news is that the success of collecting additional revenue increases with each appeal round.

Unlock New Capabilities to Address Denials and Appeals

Pharmacies can benefit significantly from revenue cycle management (RCM) systems and services that employ robust front-end edits that allow users to correct issues before submitting claims to payors. Proactively addressing potential denial-related issues is the most effective way to maintain manageable accounts receivable (AR) and improve payment propensity.

Automating appeals offers significant advantages:

1. Increased Speed and Efficiency: Automation reduces the time required to process appeals by eliminating manual steps, streamlining workflows, and enabling faster responses. This leads to quicker resolutions, allowing billing staff to focus on higher-value tasks.
2. Improved Accuracy and Consistency: Automated systems minimize clerical errors and ensure accurate, consistent appeal handling, leading to higher success rates. Automation also helps maintain compliance with regulatory requirements.
3. Cost Savings: Automating the appeal process reduces labor costs associated with manual processing and minimizes the resources needed to manage appeals. Faster resolution leads to quicker reimbursements, improving cash flow and financial sustainability.

Advanced denial management capabilities and a strategic approach to appeals are essential for successful medical billing and keeping operating costs in check. Without these capabilities, denials extend accounts receivable time, increase bad debt, and require more attention from staff, thereby escalating total billing costs.

Employ Next-Gen Medical Billing Capabilities Now

An effective RCM strategy hinges on the ability to file clean claims, necessitating a focus on exceptions to improve outcomes. Understanding and adapting to the latest denials and appeals management trends is essential for pharmacies, particularly as they expand clinical service offerings.

At XiFin, we emphasize front-end configurations, workflows, and edits to prevent denials before claims reach the payor. RCM platforms should be regularly updated with payor edit updates while remaining configurable for custom edits. Common Centers for Medicare and Medicaid Services (CMS) payor edits include:

• National Correct Coding Initiative (NCCI) edits
• Local Carrier Determinations (LCD) and National Carrier Determinations (NCD)
• Medically Unlikely Edits (MUEs)

XiFin’s RCM platform, XiFin RPM, integrates automation with prior authorization partners, allowing claims meeting criteria to be automatically submitted to a prior authorization solution. Our solution uses logic to drive appeals based on specific payor IDs, denial reason codes, and procedure codes.

Plus, we track denial trends to enhance front-end workflows and integrate automation—such as insurance discovery and prior authorization partners—to reduce the administrative burden on pharmacy finance teams.

Fill In the Gaps to Improve Your Revenue Strategy

Automating components of the denial and appeals processes ensures efficiency, reduces manual burdens, and allows pharmacies to focus more on meeting patients’ needs. By leveraging advanced denial management and appeals automation, pharmacies can significantly improve their revenue cycle management, patients’ experiences, and overall financial health.

Our eBook, Auditing the Complexities of Medical Billing for Clinical Services and Specialty Pharmacy, gives you more insight into the importance of automating denials and appeals, and it reveals key areas for improvement in your revenue strategy.