The Denial Dilemma: Prevention, Prioritization, and the P-P-T Framework

Prevention, Prioritization, and the P-P-T Framework

In Part 3, we established the true cost of denials and the importance of measuring your Initial Denial Rate. Now, we move from analysis to action. When facing higher denial volumes and a smaller workforce (The “Half the Staff” challenge), the only sustainable strategy is prevention. The key to financial success isn’t just appealing claims; it’s eliminating errors at the source.

1. Prevention is the Only Cure: The Zero-Tolerance Mindset

The single most crucial insight for maximizing revenue cycle effectiveness is that 90% of all denials are preventable.

Every denied claim represents expensive rework, costing an average of $43.84 to resolve. Therefore, the recommended philosophy is simple: Get it right the first time. Do it once. Adopting a zero-tolerance mindset toward preventable denials is essential for freeing up staff to focus on complex claims and patient care.

The path from data to dollars requires four steps:

1. Calculate KPIs
2. Analyze the data to find the root cause
3. Prioritize the most impactful problems
4. Implement changes to prevent recurrence

2. The P-P-T Framework: People, Process, Technology

Effective denial prevention requires a coordinated strategy across three pillars: People, Process, and Technology.

Pillar	Focus Area	Goal
People	Competent staff with deep revenue cycle experience.	Ensure your team is skilled, trained, and sufficient to handle the workload.
Process	Best practices and a denial feedback loop.	Implement repeatable, documented procedures that prevent errors and drive continuous improvement.
Technology	Automation, Analytics, AI/RPA, PM/EHR tools.	Apply tools that catch errors upfront and automate repetitive, high-volume tasks.

 

3. Evaluating Your Team: Do You Have “Sufficient Staff”? (The People Check)

Before you can fix processes, you must determine if your existing staff can handle the current workload. Key Performance Indicator (KPI) performance can always be traced back to operational issues, including staffing.

Here are three critical KPIs to assess if your team is keeping pace with the revenue cycle workload:

1. Revenue Realization Rate (RRR)
   • Definition: The percentage of charges either collected or contractually adjusted.
   • Benchmark: 99% – 100%.
   • Calculation Reminder:
     1. • RRR = ((Collections + Contractual Adjustments) / Gross Charges) X 100
   • Benchmark: 99% – 100%.
   • Insight: An RRR of less than 99% suggests that staff are unable to fully keep up with the workload, leading to claims falling through the cracks.
2. Insurance AR Over 120 Days
   • Definition: The dollar value of Accounts Receivable (AR) that is over 120 days old and still due from payers.
   • Insight: A large percentage of AR over 120 days that is still owed by payers is a strong indicator that staff cannot keep up with the necessary follow-up and appeals.
3. 1. Days in Accounts Receivable (AR Days)
      • Definition: The average number of days it takes a practice to get paid.
      • Benchmark: Less than 30 Days (though some specialties accept 40 days).
      • Insight: An AR Days total over 30 can suggest staff are unable to keep up with the resolution of claims.

Need to improve your RCM performance metrics? Watch our webinar on how to crush RCM KPIs!

4. Prioritizing the Biggest Problems (The Process Check)

The goal of analysis is to find the root cause of your denials, not just the symptom. You should break down your denial data to find where the breakdowns are occurring:

• Service Location
• Payer & Financial Class
• Service Item, CPT, and Service Grouping Categories
• Denial Code & Category

Prioritization Guidance:

The best way to decide which denial to tackle first is to prioritize by Impact (the highest dollar value lost) and Importance (the highest volume or frequency of denials). Always look for the Worst Offenders—the payers, codes, or locations causing the most loss—while also studying the Best Cases to understand what’s working.

Need a step-by-step guide to calculating and prioritizing KPIs? Watch the full webinar replay here!

The next step is creating a Denial Review and Feedback Loop. This is the process that ensures when a denial occurs, the knowledge is immediately fed back to the front-end staff responsible for Registration, Prior Authorization, and Coding to prevent the error from happening again.

Up Next: In Part 5, will focus entirely on Section 4’s final step: how to design, implement, and maintain a robust Denial Review and Feedback Loop that guarantees continuous prevention and process improvement in your revenue cycle.

Learn How to Improve Denials with UnisLink

Ready to tackle your medical billing denial challenges? Download our free denial management whitepaper to gain a deeper understanding of these issues and learn actionable strategies to improve your practice’s financial health.

Download your free copy of “Navigating Denial Management: An Essential Guide for Physicians” to gain actionable insights and proven strategies for building a healthier, more profitable revenue cycle.

This is just the beginning of our deep dive into medical billing denials. Be sure to subscribe to our blog to stay up-to-date with the rest of this five-part series!

Contact us today to learn more about UnisLink medical billing services and how to rightsize your practice for outstanding financial performance.

Full Series on the Top 7 RCM Metrics Every Practice Should Monitor:

Dive in deeper on each RCM metric important to the financial health of your practice.

Part 1: Why 1 in 5 Claims is Being Denied

Part 2: The Secret Language of Denials & Why You Need to Speak Fluent Code

Part 3: Decoding Denials, Measuring Performance, and Calculating the True Cost