Smart Hospital Denials Management

Revint focuses on smart hospital denials management
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Is your hospital taking the right steps to tackle denials management?

What’s involved in smart hospital denials management? To increase recoveries it comes down to communication between professionals in coding, clinicians, and smart legal insights stitched into the appeal process as well as the ability to identify denial and payer trends for prevention and process improvement.

How bad is the denials situation? The American Health Information Management Association (AHIMA) carried an in-depth article on battling coding denial trends in which the authors found that “Among recent trends, claim denials from Medicare, Medicaid, and commercial payers are on the rise, with a steady increase in commercial denials. In fact, 80 percent of denials are now from commercial payers. Furthermore, the median for successful appeals for hospitals fell to 45 percent for commercial payers and 41 percent for Medicaid, according to an Advisory Board report. Awareness and understanding of emerging trends is the first step toward creating a proactive appeal strategy that promotes optimal outcomes and most effectively battles denials.”

A recent article at Eide Bailly, an accounting and consulting firm, concurs that the denials situation is worsening. They write that, “Recent estimates show that gross charges that are denied by payers have grown to an alarming 15 to 20 percent of all claims submitted, and of those claims, roughly 67 percent of all denials are appealable. According to their research, top denials include:

  • Claim lacks information or has billing/submission errors
  • Non-covered charges, service is not covered under the benefit plan
  • Precertification/authorization notification is absent

And the AIHMA article points out that “distinguishing coding denials from clinical validation denials is an ongoing challenge. HIM professionals are seeing more clinical validation denials, especially where payers use a combination of clinical and coding references, making it hard to determine the type of denial. In some cases, a coding reference may be used inappropriately to support a clinical validation. This is a growing issue that demands a dual approach to writing appeals.” The areas for hospital denials management concern are broken out in the article:

  • Heightened focus on clinical validation
  • Shift from inpatient to outpatient denials
  • Higher volume of HEDIS (Healthcare Effectiveness Data and Information Set) and risk adjustment requests
  • Queries and review dates subject to heightened payer scrutiny

Toward smart solutions for hospital denials management

The AIHMA recommends a dual approach, writing that “HIM professionals are seeing more clinical validation denials, especially where payers use a combination of clinical and coding references, making it hard to determine the type of denial. In some cases, a coding reference may be used inappropriately to support a clinical validation. This is a growing issue that demands a dual approach to writing appeals.”

Communication is part of the solution: The emphasis continues to be on “accurate coding, complete clinical documentation, and clean claims,” as a recent article in RevCycle Intelligence explains. Communication and education are two more factors that go into a smart compliance program, with webinars given as just one how-to example. For an example of why communication has to be a key part of your solution, the editors write that, “Coding teams are responsible for ensuring patient records and claims contain a complete and accurate list of clinical and billing codes. And documentation specialists are accountable for verifying that all the information needed to demonstrate medical necessity and other documentation requirements is present and in the correct format. But department heads and frontline providers are also liable for what is finalized in a patient’s record and the subsequent claim for the encounter.”

Collaboration across departments and focuses is key. The AIHMA editors also note that “coding experts—who specialize in coding rules and regulations—and clinicians—nurses, physicians, nurse practitioners, physician assistants—should work together to appropriately respond to denials. Collaboration between coding and clinical documentation improvement (CDI) professionals is essential.”

Artificial Intelligence (AI) to the rescue? For the article, the RevCycle Intelligence editors interviewed Amanda Hyer, a product manager for 3M. Hyer believes that “artificial intelligence and machine learning will be major technology areas in the compliance space. The technologies will be able to review claims data, reconcile it with what we get back from the payers, and help us bring forward where those trends are that we currently don’t always see unless we’re actually pulling data and analyzing and manipulating it using the human touch.”

AIHMA also gives some insight on teaming up with experts and technology as part of a smart solution. “Data collection and reporting are critical to an effective denial management program. At Yale New Haven Health, a large hospital and physician network based in Connecticut, denial management and appeal technology has been implemented and combined with a team of experts to manage the volume of denials and pursue the appeal process across the system. This dual approach is designed to help the organization eventually move from payer denial management to proactive denial prevention.”

What solutions have clinicians found? Sound Physicians, an outsourcing company fielding thousands of clinicians to hospitals nationwide, gets right to the solution point by encouraging that you answer the basic question  — why? Simon Ahtaridis, MD, MPH, National Clinical Advisor and Chief Medical Officer for Sound Physicians writes, “You must identify the root causes of denials. Start by looking for trends. Are there technical errors causing denials? Is poor documentation a major culprit? Make a list of identified items and commit to fixing them. Those problems are your opportunities. Leave no room for excuses! You might find that you need an additional resource, such as a physician advisor, to provide commercial payer education and documentation training.” Dr. Aharidis also recommends a series of steps that include:

  • Confirm that you are placing patients in the appropriate status
  • Don’t be afraid to hold your ground with payers
  • Understand your commercial payer contracts
  • Know the rules for appeals
  • Get educated on how to articulate medical necessity
  • Bring in trained and experienced support

Communication. Collaboration. Denials Trends. Technology. Experts. It makes sense, but as our hospital clients know, putting it together takes time and hard work. We’ll continue to watch this important focus area with an eye on solutions for hospital denials management.

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