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Denial Management

Date post:07-Nov-2014
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Claim denials are costly. Learn the basics of establishing a strong denial management process and strategies to place your focus on denial prevention. Learn to reduce your costs associated with collection on your claims, reduce your days in AR and maintain a healthier Revenue Cycle.
  • 1. Denial Management Wednesday, September 3, 2014 Disclaimer: Nothing that we are sharing is intended as legally binding or prescriptive advice. This presentation is a synthesis of publically available information and best practices.
  • 2. Denial Management In an industry, thats ever changing, one thing remains consistent- delivery of healthcare must first be viewed as a business. If you are not profitable, you cant keep the doors open to provide services to your patients in need. Denial Management becomes critical to your business, and prevents your profits from being spent unnecessarily on appeals and resubmissions. A strong denial management workflow and structure, in the end, allows you to invest those dollars that may have been lost, back into your practice.
  • 3. Denials eat away at your profits, become an unnecessary expense, and too often are viewed as part of our day to day.
  • 4. The cost of a denial? 99211- $20.06 90460-$25.08 Denial-? 99441-$13.97 99407-$27.58
  • 5. For a practice that receives an average of 150 denials month, the total impact is $45,000/yr. 99211- $20.06 90460-$25.08 Denial-$25.00 99441-$13.97 99407-$27.58
  • 6. Denial Management An effective Denial Management process takes the following areas of focus. If done well, and done as a process, you can achieve the Best Practice standards of less than 2% denial rate. Report Denial % Monthly Should be less than 2% of your submitted charges Analyze Set up the appropriate reports Identify issues at a high level Evaluate what is being denied weekly
  • 7. Denial Management Take action to prevent the same denials in the future. Evaluate the process and workflow surrounding the denial. Identify potential opportunities for additional training. What tools are available to the staff to prevent the issues? Implement Automation where possible. Monitor action taken on denials. Worked within 24 hours? Did their work result in payment?
  • 8. Analysis Develop a report to capture your denials By Reason Code By Payer By CPT
  • 9. Report Denials By Reason Code When you review your denials by reason code, you gain a high level snapshot of where your opportunities are for fine tuning processes, workflow, and training. When you run your denials reports by reason code, your findings may look similar to the list below: Reason Code Description # of Claims denied % of Denials Additional Information Requested 12 8.05% Coverage not in effect at the time 18 of service 12.08% Exceeds Maximum number of units 2 1.34% Diagnosis not covered 5 3.36% New Patient Qualifications not met 4 2.68% No Authorization 36 24.16% Timely Filing 63 42.28% Non Covered 9 6.04%
  • 10. The Denial Categories Its important to break your denials down into categories. This will allow you to segregate the issues. Identify the owners within your practice for each of these categories. Utilization Management Denials Patient Registration Documentation and Coding Charge Entry Claims Submission Contract Management
  • 11. Categorize your denials Its important to break your denials down into categories and classify them as Preventable or Non-Preventable. This allows you to focus on the areas where the opportunities exist, and allows you to be realistic and focus on what you can prevent. Reason Code Description Category Preventable or Non Preventable Additional Information Requested Documentation and Coding Preventable Coverage not in effect at the time of service Patient Registration Preventable Exceeds Maximum number of units Documentation and Coding Preventable Diagnosis not covered Documentation and Coding Preventable New Patient Qualifications not met Documentation and Coding Preventable No Authorization Patient Registration Preventable Timely Filing Claims Submission Preventable Non Covered Documentation and Coding Non Preventable
  • 12. Identify Issues By CPT If we look at the Previous Slide, we identified a payer, where there was a significant issue with Authorizations. This could point to an issue where the staff is unaware that authorization is required for a specific Procedure. Break the Report down by: Reason code Payer CPT This may unmask specific procedures that may be causing the issue.
  • 13. Identify Payer Issues Another High level view that is important in the Denial Management Process, is to review the denials by payer. This allows you to see if you have a specific payer issue. Below is an example of authorization denials by Payer. We are easily able, from this high level view, to see that there is an issue with Payer 5. Denied: Lack of Authorization Payer Name # Denied % By Payer Payer 1 5 5% Payer 2 15 15% Payer 3 3 3% Payer 4 1 1% Payer 5 57 57% Payer 6 16 16% Payer 7 2 2% Payer 8 1 1%
  • 14. The Denial Categories Its important to break your denials down into categories. This will allow you to segregate the issues. Identify the owners within your practice for each of these categories. Utilization Management Denials Patient Registration Documentation and Coding Charge Entry Claims Submission Contract Management
  • 15. Patient Registration Denials related to Patient Registration Incorrect Plan Patient Not eligible Coverage terminated No Prior Authorization Unable to identify member Registration denials can be prevented with an effective eligibility process. Evaluate the tools available to the staff for verification of benefits. What does your software vendor offer? What does your clearinghouse offer? Automate the process where possible Can the system verify 3 days prior to the appointment and produce a report? Have an effective policy in place when it is determined that the patient doesnt have coverage. Verifying in advance allows you to reach out to the patient prior to the visit. Notifying the patient in advance that payment will be required, allows the patient to be prepared.
  • 16. Documentation and Coding Denials related to Documentation and Coding Invalid Modifier New patient criteria not met Invalid diagnosis code Expired code Bi-Lateral Procedure Coding denials can be prevented with appropriate edits in place. Evaluate the edits of your software as well as your clearinghouse software. What guidelines are followed? How often is your Service Item Library maintained?
  • 17. Charge Entry Charge review and audits are encouraged Are charges getting entered to the appropriate patient? Are payer guidelines and requirements understood by the staff? If units are accidentally entered as 20 instead of 2, does your report easily depict it
  • 18. Claims Submission Claims should be on our radar daily Did the clearinghouse receive our file? Are there claims that are sitting unbilled? And why? What rejections are we receiving at the clearinghouse level that can be prevented
  • 19. Denial Management Communicate results to anyone who has involvement with the denial process so that they can align their efforts and share in the success of your results.
  • 20. Q&A [email protected]
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