A Six Sigma Approach to Denials Management

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Student / New to Profession

Betsey Kennedy
Performance Engineer
Premier, Inc.

Stanly Regional has had a major problem with insurance claims being denied. These denials require investigation and rework and cause a substantial loss of revenue. This project offers a Six Sigma approach to reducing the volume of insurance denials and ultimately increasing revenue.


  • - In November 2007, the Revenue Cycle Team at Stanly Regional Medical Center was tasked with reducing the number of payer denials.
  • - The baseline Denials/Charges ratio was 5.47%.
  • - The Six Sigma DMAIC Methodology was utilized to minimize the quantity of denials and reduce the Denials/Charges ratio.
  • - The Denials/Charges ratio (3 month average) decreased to 4.12% (as of May 2008), resulting in an annualized savings of nearly $1.6 million.
  • - We are still working toward sustaining improvement and our Denial/Charges ratio goal of less than 2.0%.