Don't take 'no' for an answer: Revamp your denial management process
Don't take 'no' for an answer: Revamp your denial management process
Avoid getting stuck in a 'losing pattern'
The number of claims denials was always an important metric for patient access, but now it's front and center, in more ways than one.
From a business management perspective, if you don't do this well, "you will not be able to establish internal patterns of error, external payer processing problems, or root causes," says Joseph Ianelli, manager of Boston-based Massachusetts General Hospital's financial access unit. "You are always going be that hamster on the wheel."
And from a revenue perspective? "You're going to lose money," says Ianelli. "With a trauma case, that is tens, if not hundreds of thousands, of dollars you can lose. In this day and age, it's a real important thing to capture your revenue appropriately."
Increases in the number of unemployed and uninsured make timely and accurate reimbursement for the patients who are insured "more important than ever," says Jodie Martin, director of admitting and registration for the department of revenue management at University of Kentucky Healthcare. "Hiring freezes and potential lay-offs within the industry also make it imperative that the front-end work is done right," says Martin.
"The duplication of effort by people on the back end to appeal denials and capture data necessary for re-billing of claims is much too expensive for hospitals to bear in the best of times," says Martin. "It is simply unacceptable in this current economic environment."
If you don't have good denial management processes in place, says Ianelli, "there is money already on the table that you are going to be losing. And in the future, if you don't prevent it, you will always continue to be in that losing pattern."
Prioritize your efforts
Martin says that to effectively address denial management, the "entire spectrum of the revenue cycle" must be represented. This includes leaders of billing, patient access, coding, information systems, utilization management, and medical staff.
"Our enterprise denial management committee is co-chaired by a physician and two other key organizational leaders," says Martin.
The department's approach has been to organize the denials into 12 well-defined categories and focus on the high-dollar, high-volume denials for the codes within each category. Sub-groups for each selected denial code then are charged with determining causal factors and recommending solutions.
"The solutions have ranged from the development of a computer-based training module to mandatory twice-yearly refresher training for patient access staff," says Martin. "Technical solutions are being considered as well. Our initial prioritization efforts targeted denials related to authorization and eligibility. We continue to add others as the work of each sub-group is completed."
Although implementations of many of the solutions are relatively recent, Martin says that the "preliminary evaluation data on this focused approach have indicated positive results, both from a professional and a hospital billing perspective."
Mass General uses a computerized system to track denials, which come in two forms: a clinical denial typically involving level of care, which is handled by case managers, or a technical denial involving payer rules and regulations, handled by financial access staff.
A full analysis is done for each of the technical denials. If the information isn't specific enough in the denial letter sent by the payer, then the payer is contacted to get more specific information.
The next step is to characterize each denial as legitimate (meaning patient access made the mistake) or not legitimate (meaning the payer has denied the claims in error).
The department's legitimate denial rate every month is less than half a percent of total volume. "We don't know what our reimbursement would be on the access side, although that might be a goal for the future," says Ianelli. "So we just report that in charges. We do a full analysis every month, which tells us if staff are having problems and which ones are having legitimate denials."
Ianelli says a small number of legitimate denials are bound to happen from time to time with the high volume of the facility, such as a missed deadline due to human error. "Depending on if it's an established pattern with a staff member, there might be different levels of intervention," he adds.
An example of a legitimate denial would be a failure to notify the payer within a business day about an emergency admission. "If we don't, they deny the case. Luckily, we have very few of those now because we identified it as a problem a long time ago," says Ianelli. "It's really an avoidable denial, because we have reports for who is admitted and staff are well aware of the requirements."
Sometimes, though, staff aren't able to gather the correct insurance information when a patient comes into the ED because the patient is unable to communicate. If there is a delay in getting that information, that could cause a denial.
"But we would consider that non-legitimate. If we can prove that the patient wasn't able to speak at the time of registration, we can usually win the appeal," says Jessica Rodin, financial access unit supervisor. Rodin writes all of the appeals for the hospital's financial access unit.
Another example of a legitimate denial would be a patient's admission being scheduled for a given date, with authorization obtained for that date, but then the physician's office calls and changes the date.
"We have a way to catch those as well. But if we don't notify the payer, they will deny it even though it was technically authorized because the dates don't match," says Rodin.
Without documentation, 'the appeal is lost'
Ianelli says that "for us, it's all about documentation. If we don't have all the documentation, we're going to lose the appeal," says Ianelli. "My team is getting very good at making up a bullet point list of what we did and sending an appeal letter. We have very good luck overturning denials."
For example, if a patient comes in as a self-pay, the hospital's group of financial counselors starts the process of trying to figure out whether the patient is going to end up being eligible for a state or federal program, or whether there is any insurance coverage.
If the information isn't available, the financial counselors can't just say so. They are required to document every attempt they make to see the patient - such as whether the patient was taking tests and couldn't speak with them or the patient was unconscious. Similarly, if the patient's identity is initially unknown but a family member comes forward with an insurance card at a later date, all of this also is documented.
Payers examine this documentation very closely. "Our notes are dated by the computer, and they will look to see if somebody went up to see the patient," says Rodin. "I've had appeals that I couldn't win because there wasn't enough documentation. They told us, 'From your notes, it looks like nobody saw the patient for five days.' And they may have, but if we didn't document it, then the appeal is lost."
Authorizations or proof of notification are another important piece of documentation for appeals. With some payers, this is now done electronically either through the payer's web site or another portal.
For elective procedures, however, denials typically don't happen because the approval is obtained before - not after - the patient's visit. "If there's somebody saying we can't approve this, the patient doesn't get into the hospital until the approval is there," says Ianelli. "We try to work using more of a prevention model."
Staff resolve their own errors
Each denial is a learning tool for patient access staff, who don't want to make the same mistake again. At Mass General, this is especially true because the staff member will be the one calling the payer if the claim is denied.
"We really get the staff involved in denials. It is part of their job to call the payer and try to get the denial overturned," says Ianelli. "They learn from the mistake, and also, they are the ones who can best advise us of any shenanigans going on at the payer. We join them arm in arm, and they are pretty involved in helping us figure out what's going on."
Rodin sends "each and every" denial to the person who handled it to begin with. The staff member is told the claim was denied and the reason given by the payer and asked to call to check it out. Many times, the payer agrees to pay the claim over the phone.
Ianelli says he implemented this practice when he arrived about seven years ago. Although one or two staff members transitioned out of the department, the ones who stayed became involved in the process in a new way.
"Until we did this piece and helped people become part of the solution, they didn't understand the implications of a denial," says Ianelli. "Now they know that if they don't do it right, they will see it again. The other good piece is if they call the payer, they can ask what they could have done differently and start a dialogue."
Sometimes, something useful is learned from the payer about the denied claim. In this case, the information is shared with the staff in the group handling that payer. "This may be done at a monthly staff meeting or by alerting each group in an informal meeting if it's something that can't wait," says Ianelli.
At times, payers may make sudden changes in their requirements. For example, most surgery doesn't require an authorization, so those staff only have to check the patient's eligibility, but there is always an exceptions list. A payer may suddenly post a new addition to that list on its web site.
"And if you haven't gone on the web site, you won't know about it," says Ianelli. "They expect us to go to the web site and check for updates constantly. Nobody in hospital operations has the time to do that. They tell us, 'It's part of the contract,' but that is not particularly helpful to an access group."
Payers also have been known to suddenly start denying a large number of cases for an unknown reason. In one case, authorizations were getting deleted from the system. "We couldn't figure out what was happening, but it seemed to be on their end," says Rodin. "As soon as we catch something like that happening, we go after them and they usually knock it off."
If a payer suddenly breaks an established pattern by denying claims that should be approved, the "back end" gets involved, as the hospital's patient account representatives have good relationships with the payers.
"We try not to write appeals for those, because why waste our time if the payer's system is messing up? Instead, we give the whole block of them back to the payer, and we say, 'Take a look at these, because we already have and we don't think we should be writing appeals for your errors,'" says Ianelli.
Although the financial access unit hasn't seen the number of overall denied claims increase outright, other more subtle changes have been noted, which are resulting in less revenue for the hospital.
"I think what is happening is that the plans are shifting things around and trying new things that are making us a little bit beside ourselves," says Ianelli. "They are trying these creative pieces, in order for them, I believe, to save money."
For instance, one payer just decided that if a patient is admitted through the emergency department and goes in to surgery on the second day of his or her stay, it will deny the first day for inpatient services and pay at the observation rate only.
"In a way, that is an underpayment. We consider that kind of a denial as well," says Ianelli. The payer pays for days two and three, but if more information isn't given after day three, the claim isn't paid.
"Upon entering the information, they give you a length of stay. If that varies and you don't call and get authorization after that, they will deny anything from there on," says Ianelli. "That is a clinical denial and is handled by case management, but it's a denial nonetheless."
Last year, a payer instituted a new requirement that staff had to notify it of a patient's arrival within 24 hours. "This is different from every other payer," says Ianelli. "This means that on Christmas day, you have to let them know that someone came in on Christmas Eve. So we now have to staff every single day."
Another payer now requires "smart sheets" to be faxed to it, which doctors' offices must complete in order for a decision to be made about whether a surgical service will be authorized. Formerly, authorization was not required for surgery.
"They use these as a decision-making tree, but since we are not clinicians, the doctors' offices have to get them to us, and we get them to the payer. That is a big burden, which delays things," says Ianelli. "And we're not sure how that might fall out, appeal-wise."
These and other new requirements are making the job of financial access staff harder. "It is making the administrative burden more difficult for us," says Ianelli. "And it's unclear what it's going to mean for appeals. The rules seem to be changing."
[For more information, contact:
- Jodie Martin, Director of Admitting and Registration, Department of Revenue Management, University of Kentucky Healthcare. Phone: (859) 323-5808. Fax: (859) 257-2184. E-mail: [email protected].
- Joseph Ianelli, Manager, Financial Access Unit, Massachusetts General Hospital. Phone: (617) 724-2099. E-mail: [email protected].]
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