2016 study finds low adoption but large opportunity in RCM denial management solution space
HIMSS Analytics recently released its 2016 RCM Denial Management Essentials Brief, a study of the U.S. hospital denial management market. Essential Briefs are market research studies focused on identifying salient topics in the healthcare IT space that highlight mind share, market share and market opportunity of specific healthcare software technologies.
What is denial management?
For the purposes of our study, we defined denial management as a process that leads to cleaner submitted claims and fewer denials from payers. This process can involve a vendor provided solution, a solution built in-house, or a manual process.
Adoption of denial management solutions
The process of claims and denial management can be complex as organizations typically deal with multiple payers and the effort needed to research and appeal denials can be laborious. Based upon the 2016 RCM Denial Management Essentials Brief, adoption of a vendor-provided denial management solution remains relatively low and thus there is ample opportunity for denial management solutions. Those without a specific vendor solution rely upon solutions built internally or with manual processes that meet their current needs. Despite the low adoption rate, respondents indicated a high level of satisfaction with their vendor provided denial management solution and would recommend the solution they use to a colleague. This detail underlies the benefits of automating the claims and denial management process, which include identifying root causes of denials and contributing to the reduction of denial write-offs.
The transition from volume to value based care and the use of alternative payment models (APMs) could have a significant impact on the denial management process, depending on which type of APM is in use. However, this transition is not going to happen overnight. Organizations will need to rely upon these solutions and processes and continue to collect payments until the move to APMs has been established on a larger scale across the healthcare industry. Although the level of organizations with plans to invest in a vendor provided denial management solution is limited, there is a significant amount of green space in this application area and a need to simplify or automate these processes to signify the potential for ample investment opportunity.