As payers deploy advanced technologies to review claims, health systems like Mercyhealth and WellStar are fighting back with stricter contracts and predictive AI.
In recent years, the fierce struggle to combat denial has gradually intensified. During this week’s The Winning Edge for Defeating Denials webinar, revenue cycle leaders from Mercyhealth and Wellstar Health System discussed whether high denial rates will persist in the future and what health systems can do to address them.
The increase in denial rates is largely due to payers using AI tools to automate claims review. Health systems will likely never close this Pandora’s box, but they can rethink their strategy.
“We’re talking about computer-assisted validation versus people previously having to go through and validate,” said Bradley Olson, vice president of managed care for Mercyhealth. “Providers are going to have to be as aggressive as payers have been in the past.”
Contract negotiations as the first line of defense
A proactive approach to handling rejections begins during contract negotiations, according to Olson. Health systems must look beyond reimbursement rates and focus on the administrative challenges of paying claims. These include outdated communication methods, inconsistent rules, and excessive requests for medical records.
Olson advises health systems to include contractual provisions that require payers to return to the negotiating table if they make changes that have a significant financial impact on providers. This relies on an effective joint operational committee to foster ongoing dialogue with payers.
“It’s very important because at least they have to sit down in front of you on a monthly or quarterly basis and at least talk to you face to face,” Olson said. “It’s not about hiding behind the veil of a contract or some kind of technology.”
Efficient technology, from front-end eligibility to back-end calls
At WellStar Health System, the strategy relies on implementing automation to handle the manual and repetitive tasks associated with revenue cycle denial management, freeing up human staff for complex problem solving.
Although denial rates have remained stable, Lewis says, the tools needed to manage them have evolved. On the front end, WellStar uses AI-powered bots for real-time eligibility and benefits verification to prevent errors downstream.
“These tools automatically verify insurance coverage and benefits details before services are rendered,” Lewis said. “It really reduces a lot of manual errors.”
On the back end, Wellstar uses automated workflows to manage payer tracking and cash accounting.
The need for collaboration
It is crucial to maintain open lines of communication with other departments beyond the revenue cycle. At Wellstar, there is a strong emphasis on interdepartmental collaboration, which includes monthly denials meetings organized by service line. These sessions include representatives from the operational, medical coding, utilization, and clinical teams.
“By having this structured forum for cross-functional collaboration, we can really more proactively address the root cause of denials and really drive that continuous improvement,” Lewis said.
At Mercyhealth, managed care teams serve as a bridge, translating complex payer policies for coding and authorization teams to ensure everyone is on the same page.
Asked about the road ahead, both revenue cycle executives were hopeful, but also bracing for continued frustration from payers. They predict that although the number of denials could increase in the short term as payers adopt new tools, providers are learning to fight back.
