Ensure your First Time Claim Acceptance Rate is above 95%

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Submitting claims to insurance companies is your agency asking for money – getting the claim accepted is your agency getting paid.  The percentage of claims that are accepted by insurance companies for payment the first time is your First Time Claim Acceptance Rate.

It is important that behavioral healthcare agencies measure and monitor the percentage of claims that are accepted the first time because it is a key indicator of the overall health of your billing processes and procedures.  

There are very real consequences of first time claim rejections, so keeping track of your first time acceptance rate will ensure that your billing operation is doing its part to keep your cash flow stable.

If you are not measuring your first time claim acceptance rate, you should start.  If you are measuring it and it’s below 95%, you should highly consider exploring ways to improve it.

The Consequences of Claim Rejections

Many insurance companies will only accept claims within 90 days from the time of the visit – called ‘timely filing’.  This puts your agency on the clock whether you like it or not.  If you’re an agency that bills monthly, a claim rejection can put you over half way into your allowable billing time.  Regardless of how frequent you bill insurance, every claim rejection presents an important question for your agency:

“Is the cost of chasing the claim rejection worth the amount I will receive when the claim is paid?” 

Since that is a question no one wants to have to answer, getting claims accepted the first time they are submitted is the true answer.  Working claim rejections is an important part of your billing process, but limiting the number of claims that need to be investigated will go a long way in maximizing the productivity of your billing personnel and add value to your agency.

The cost of working a specific claim rejection is largely unknown, because you cannot predict how long it will take to bring a single claim to resolution.  The insurance companies will tell you the first reason a claim is denied, but not necessarily all of the reasons that it will be denied.  If your claim has multiple errors you may find yourself re-submitting the claim multiple times before it is accepted. 

What You Can Do About It

Software solutions should help you eliminate errors on the front end before claims are submitted however, you still need to have a process and business rules that are timely enough to allow you to work the claims in the event of rejections.

It all starts with Insurance Eligibility Checking.  Checking the insurance eligibility of your clients before providing services is imperative to keeping a high first time acceptance rate. You don’t want to provide unbillable services or work any unnecessary claims if you can identify a client without coverage prior to their appointment.

By continuing to track eligibility throughout an episode of care you catch if coverage has lapsed or changed. From there you can answer important questions up front like; do you have the right insurance company, right member ID, is this service covered, etc. Answering these questions before delivering services and submitting claims will go a long way to getting your claims accepted the first time.

After eligibility checking, you want to execute a series of “scrubbers” that will protect you from submitting claims with errors, or receiving payments for services that don’t have the proper documentation when audited.

The Scrubbers

  1. Scrub the claims against the business process. e. was the progress note signed by a service provider with the proper credentials for that payer, etc.
  2. Scrub against documentation and program rules. Do you have the necessary documentation to bill, or did you meet any necessary programmatic requirements to submit a claim, such as authorizations or number of services limited by service type, etc.
  3. Scrub against the HIPAA file format for the necessary data elements in the right place. Revenue codes, NPI, etc.

If you are tracking your business on paper charts these scrubbers will consume a lot of effort, but there are software solutions like eCR™ for all types of service modalities to help you automate the billing scrubber process.

For Claim Rejections - Use the 277 and 999 Files to Your Advantage

After submitting your claims you need to use your 999 File Acknowledgement and 277 Claim Acknowledgement files to your advantage.  Start working your claim rejections right away.  Although it is tempting, resist the urge to wait until you receive the explanation of benefits (EOB) from the payer or your next billing cycle to work and submit the claims because you don’t know how long it will take to investigate the rejections.  World Class billing organizations begin working claims as soon as the file has been uploaded in order to stay ahead of the insurance timelines and minimize potential cash flow issues due to inflated accounts receivables.

Software will help you create the time to work the rejections, but you still have to look at the files and work them.

Get your First Time Acceptance Rate to 100%

There are a couple of key factors to achieving a good first time acceptance rate.  You need to have the right software solutions, and you need to have the right people. Software is important, but if you don’t have the people who understand how to submit claims and work rejections, you may be better served by employing a Revenue Cycle Management service.

If you have a good first time rate, you can still make it better.  This is an area of your business that it is always worth improving, and once improved it is important to monitor and maintain for the ongoing financial health of your agency.


For deeper insights into how you can use measured data to improve your agency, learn about discovery data mining in the new white paper "Who's your best clinician?"

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Topics: Business Process, Things You Should Measure