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Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial...

Date post: 18-Jan-2016
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Page 1: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.
Page 2: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Discussion Topics

• Cost of denied claims• First Pass Denial rate versus traditional

Denial Rate calculations• Critical denial points in billing process• Improving First Pass Denial rate• Denial reporting• Appeal processing and tracking

Page 3: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Timeline of a Paid Claim

Page 4: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Payment Turnaround Times

Page 5: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Timeline of a Denied Claim

-100102030405060708090

Pre-Reg DOS Coding Billed Denied Rebilled Paid

Page 6: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Payment turnaround times

• If you bill correctly, they will pay.• If you bill correctly, they will pay most

claims in 15 days.• If you bill most of your claims correctly,

keep your unbilled to less than 7 days, GDRO in the 30 is easy!

Page 7: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

First Pass Denial rate will tell you what percent of claims are NOT

getting billed out correctly.

How important is FPD Rate?

Page 8: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Cost of unnecessary denials

Cost to rework a claim due to denial = $25Denial rates average 10-40% of claims

20,000 claims  x  20% FPDR  =  4,000 denials  4000 x  $25 per denial  =  $100,000/month

1500 denials worked per FTE per month

Page 9: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Calculating Denial Rates

How are denial rates reported?• Only denials that result in write off• Anything requiring rework• Service line versus total claim denial• Charges as a percent of revenue• Volume of denials being reworked by

staff• By root cause or responsible area

Page 10: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Dashboard

Page 11: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Critical Denial Points

• Edits (before claim leaves)– Registration edits– Coding edits– Patient Accounting system edits– Billing system/clearinghouse edits

• Denials (after claim leaves)– 277/999 Payer electronic denials– Return to Provider denials (Medicare)– Remit denials

Page 12: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Timeline of Critical Denial Points

0

5

10

15

20

25

30

35

RegistrationEdits

PA SystemEdits

BillingSystem Edits

NEIC Denials RTP Denials RemitDenials

Page 13: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Change Denials into Edits

• Start with Remit Denials since they delay payment turnaround the longest

• Add RTP and 277 Denials to process• When changing Denials to Edits, shoot for

the earliest possible point in the timeline (Registration/Coding)

• Prioritize issues by dollar and volume

Page 14: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Denials Management

• Track all denials by payer• Use system reports – Zero pay posting with

reason codes• Select highest volume and highest dollar

denial reasons each month to focus on reducing or eliminating

• Add required registration fields, coding, prior authorization and billing edits or system holds to prevent claims from billing with incorrect data.

Page 15: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Sample Denial Report

Denial Code Description

22 This care may be covered by another payer per coordination of benefits.

18 Exact duplicate claim/service (Use only with Group Code OA except where state workers' compensation regulations requires CO)

227Information requested from the patient/insured/responsible party was not provided or was insufficient/incomplete. At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.)

A1 Claim/Service denied. At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.)

221

Claim is under investigation. Note: If adjustment is at the Claim Level, the payer must send and the provider should refer to the 835 Insurance Policy Number Segment (Loop 2100 Other Claim Related Information REF qualifier 'IG') for the jurisdictional regulation. If adjustment is at the Line Level, the payer must send and the provider should refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment information REF). (Note: To be used by Property & Casualty only)

Page 16: Improving First Pass Denial Payment Rate. Discussion Topics Cost of denied claims First Pass Denial rate versus traditional Denial Rate calculations Critical.

Denial Categories

• Additional info requested - Patient

• Additional info requested - Provider

• Additional info requested• Authorization/Pre-Cert• Benefits Exhausted• Billing Related - Edit Review

needed• Other Facility Overlap

• Coding• Duplicate/Overlap• Eligibility/Coverage• Exceeds Frequency• Medical Necessity• Timely Filing• COB Issue• Provider Enrollment• Other


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