By Lemuel Areglo, CPC | Director of Revenue Cycle Management Services
Key Takeaways
- Unresolved denials, infrequent A/R reviews, and aging patient balances can severely impact your practice’s financial health. By the time these issues become apparent, cash flow may already be compromised.
- Many denials are avoidable, not unavoidable. Issues such as incomplete documentation, coding inaccuracies, and verification lapses can be addressed before claims are submitted, provided you have robust verification and scrubbing processes in place.
- Patients who are informed of their financial responsibilities upfront tend to pay more promptly and are less likely to dispute charges. Unexpected bills often lead to dissatisfaction and delayed payments.
- Revenue cycle issues don’t manifest overnight. They develop gradually, and by the time they are recognized, cash flow may already be affected.
This guide addresses the prevalent reasons for collection delays and offers actionable workflows to rectify them. Focus on the section that currently poses the greatest challenge — each is designed to be self-contained.
Table of Contents
Understanding Billing Challenges in Dermatology
The straightforward explanation: ownership of the billing process is often unclear.
Front desk staff may assume that billing will handle eligibility verification, while billing may rely on complete clinical documentation. This lack of clarity can lead to claims falling through the cracks, resulting in unpleasant surprises when the A/R report is reviewed.
Dermatology practices face unique challenges. Dermatology billing differs significantly from billing in other specialties. A general billing team managing multiple specialties may lack the specialized knowledge required to identify dermatology-specific errors before claims are submitted, leading to compounded issues.
The most frequent issues include:
- Verification lapses — Failing to confirm insurance coverage prior to the visit can result in claims being sent to the wrong payer or denied altogether, leading to delays in resubmission.
- Documentation gaps — If clinical notes do not adequately justify the services rendered, payers are likely to reject the claim. They do not typically extend the benefit of the doubt.
- Coding inaccuracies — Incorrect CPT or ICD-10 codes can lead to underpayment or denial. Specialty coding requires a level of expertise that many generalist billers may not possess.
- Lack of follow-up procedures — Claims can age without follow-up, leading to missed timely filing deadlines and unrecoverable claims.
Establishing a Denial Management System
Denial management should be viewed as a structured system rather than a reactive cleanup task, encompassing three key components: prevention, identification, and resolution.
Preventing Denials Before Submission
Most denials can be prevented. The primary reasons — missing information, eligibility issues, and coding inaccuracies — can all be identified before claims are submitted.
Ensure insurance eligibility is verified prior to each appointment, not just at check-in. Confirm the payer, plan type, copay, deductible status, and any prior authorization requirements, and document this information.
Utilize claim scrubbing before submission. Your billing software should identify missing modifiers, bundling issues, and frequency limit violations. If it does not, you risk sending out claims that are likely to be denied.
Immediate Denial Identification
When a denial is received, route it for review on the same day. Every hour it remains unaddressed brings you closer to missing the timely filing deadline. Categorize denials by reason code — eligibility, authorization, coding, documentation, duplicate — and monitor for patterns. If one provider has a higher denial rate than others, it may indicate a documentation issue. If a particular payer denies claims more frequently, it could signal a contract issue.
Resolving Denials Within 48 Hours
Aim to resolve denials within 48 hours of receipt. If a denial cannot be resolved at the first level, escalate it promptly and avoid letting it linger. Document the resolution steps for each type of denial to ensure staff do not have to reinvent the process each time.
Effective A/R Follow-Up Strategies
The reality is that reviewing A/R monthly is insufficient; it is merely documentation. True follow-up should occur weekly, prioritizing claims based on age and dollar amount.
The likelihood of collection decreases significantly as claims age. Claims under 30 days have a collection probability exceeding 95%, while those over 120 days may drop below 50%. Each week of inaction diminishes your chances of recovery.
A straightforward weekly routine:
- Day 1 — Review claims aged 0–30 days. Confirm receipt and ensure claims are being processed.
- Day 2 — Address claims aged 31–60 days. Contact payers for any claims with no activity and document every interaction.
- Day 3 — Escalate claims aged 61–90 days. These are nearing critical age.
- Day 4 — Take aggressive action on claims over 90 days. Check for timely filing deadlines and ensure these claims do not go unresolved.
- Day 5 — Follow up on patient balances and initiate discussions regarding payment plans.
KPIs to track:
Metric
Target
Days in A/R
Under 35
A/R over 90 days
Under 15% of total
Clean claim rate
95%+
Denial rate
Under 5%
Identifying Claims Delays
Inefficiencies in billing often stem from either role confusion or errors during patient intake.
When one individual manages registration, eligibility, charge entry, and follow-up, accountability diminishes. It is crucial to separate front-end tasks (registration, eligibility, authorization) from back-end tasks (coding, billing, A/R) to maintain clarity and efficiency, even in smaller practices.
Another significant issue is poor data collection at intake. Incorrect insurance IDs, demographic errors, and missing authorization numbers can lead to claim failures later in the process, especially when the visit is weeks old and documentation is no longer fresh.
Advanced EHR vendors provide AI-powered intake platforms that enhance intake accuracy and alleviate front desk bottlenecks, ultimately reducing data errors that can delay your claims.
Verify information prior to the appointment:
- Patient demographics
- Active insurance coverage and effective dates
- Copay, deductible, and coinsurance status
- Prior authorization (if required)
- Estimated patient responsibility communicated to the patient
Submit claims daily rather than in weekly batches. Daily submissions allow errors to be identified while the encounter is still fresh and catch clearinghouse rejections early — a rejected claim will not be in the payer’s queue at all.
Strategies for Patient Collections
With the rise of high-deductible plans, patient financial responsibility has increased significantly. Collecting these amounts requires a different approach compared to collecting from payers.
The key factor is not merely the design of your statements, but the conversations you have with patients before their visits. Patients who understand their financial obligations upfront are more likely to pay promptly and have fewer complaints. Conversely, those who receive unexpected bills are less likely to pay and may not return.
Collect copays at check-in. Send statements within a week of claim adjudication. Facilitate easy payment options online, via phone, text-to-pay, and offer payment plans for larger balances. Patients who have multiple payment options are more likely to utilize them.
A recommended outreach schedule:
- Statement sent on day 0 (post-adjudication)
- Reminder sent on day 30 (statement + email or text)
- Phone call made on day 45
- Final notice issued on day 60 with a payment plan offer
- Consider collections at day 90
Document every attempt. A thorough paper trail is essential if an account is ever sent to collections.
Quick-Reference Checklists
Pre-visit
- Demographics verified
- Eligibility confirmed
- Benefits documented
- Authorization obtained (if required)
- Patient informed of estimated costs
Claim submission
- All fields completed
- Diagnosis codes support medical necessity
- Procedure codes align with documentation
- Modifiers applied correctly
- Claim scrubbed
Denial management
- Denial identified within 24 hours
- Reason code categorized
- Resolution initiated within 48 hours
- Appeal filed (if applicable)
- Root cause documented for tracking patterns
Patient collections
- Copay collected at time of service
- Statement sent within 7 days of adjudication
- 30-day reminder dispatched
- 45-day phone outreach attempted
- Payment plan offered before day 60
The Integration Challenge Many Practices Overlook
Much of the inefficiency in billing arises from handoff issues rather than personnel problems. When clinical documentation, practice management, and billing operate in separate systems, data must be re-entered, leading to errors and missed charges.
Derm-Cloud integrates all three components into a single platform. When a provider completes an encounter, billing processes begin immediately with complete clinical context — no exports, no manual entry, no gaps. For practices seeking further support, Derm-Cloud Billing Services offers dedicated specialists who understand dermatology, adhere to the weekly A/R cadence, and identify denial patterns before they escalate into revenue issues.
If your in-house billing team is struggling with high volumes, increasing denial rates, or staff turnover disrupting continuity, it may be time to consider outsourcing as a viable solution.
The workflows outlined above are effective. The critical question is whether your current setup can support them. If it cannot, it may be worth reevaluating your approach.
Talk to our billing team for a FREE billing analysis.
Lemuel Areglo, CPC
is the Director of Revenue Cycle Management Services at WRS Health, bringing nearly 15 years of experience leading medical billing, coding, credentialing, and revenue cycle operations across the healthcare industry. Lemuel’s expertise spans the full revenue cycle, including claims management, denial resolution, payment posting, accounts receivable, and practice operations. He has extensive experience supporting specialties including dermatology, psychiatry, physical therapy, pain management, internal medicine, orthopedic surgery, speech therapy, and sleep medicine.
