Jane Turner,BSN,RN,M.S., CCM Vice President of ...Transition from: fee-for-service payment model Transition to: risk-bearing, coordinated model Bundled payments CMS joint replacement
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Jane Turner,BSN,RN,M.S., CCMVice President of OperationsPremier Medical Appeals
*Book by CK Prahalad
INTRODUCTION
DENIAL TYPES
COMMERCIAL VERSUS GOVERNMENT
DENIAL MANAGEMENT PROCESS
Decreasing profit marginsVolume leakage
Point-of-Service collection
Clinical documentation quality
Competing reimbursement models
Governmental regulations
Denials
Patient Safety and Quality
Technology
Managing risk-based health care delivery
Mergers/acquisitions/affiliations
http://www.beckershospitalreview.com/finance/cfos-name-top-6-challenges-in-2017.html
Medicare Access and CHIP Reauthorization Act
Transformative law Transition from: fee-for-service payment model
Transition to: risk-bearing, coordinated model
Bundled paymentsCMS joint replacement (April 2016)
CABG / AMI bundled payments selected markets, July 2017
http://managedhealthcareexecutive.modernmedicine.com/managed-healthcare-executive/news/three-reimbursement-changes-watch-2017?page=0%2C1
49.05%
29.27%
16.08%
2.80%
2.70%
0.10%
Private third-party payors
Medicare
Medicaid
Other government payors
Private self-payors
Other
Medicare Access and CHIP Reauthorization Act
Transformative law Transition from: fee-for-service payment model
Transition to: risk-bearing, coordinated model
Bundled paymentsCMS joint replacement (April 2016)
CABG / AMI bundled payments selected markets, July 2017
https://www.healthcatalyst.com/top-healthcare-trends-challenges
CMS - increased scrutiny to decrease costs
Hospital Provider - increased need for analytics Appropriate utilization of hospital resources
Minimize readmissions
Properly allocate costs
Physician Provider – incurring penalties (1%) for failure to implement Electronic Health Records
http://www.beckershospitalreview.com/finance/cms-releases-macra-final-rule-10-things-to-know.html
Any situation where a payment is less than the amount that was contractually agreed for the services rendered
The refusal of a payer to honor a request by an individual or the representing provider to pay for a health care service obtained from a health care professional
http://hcmarketplace.com/media/supplemental/3659_browse.pdf
EideBailly.com
Soft denial- A temporary or interim denial that has the potential to be paid if the provider takes corrective action. No appeal required
Hard Denial –A denial that results in lost or write –off revenue
Preventable or Avoidable –A hard denial resulting from action or inaction of the part of provider of services
Clinical Denial – denial of payment due to medical necessity
Technical or Administrative – A denial in which the payor has notified the provider by way of remittance advice with specific information describing why the claim or specific item was denied
www.eidebailly.com Implementing an Effective Denials Management Program
Denials can result in a loss of net revenue, often as much as 3%
Approximately 67% of all denials are appealable
90% are preventable
http://www.ucop.edu/ethics-compliance-audit-services/_files/webinars/4-9-15-denial-management/denial-management.pdfhttp://www.healthcarefinancenews.com/sponsored-insights/getting-front-problem-how-can...
Rejected Claims Claims that do not meet the specific data requirements or the basic format necessary will be rejected
Rejected claims will not be processed because they are not considered to have been “received” by the payor, thus do not make it into the adjudication system.
Corrected claim needs to be resubmitted
Denied ClaimsClaims that have been received by the payor’s adjudication system, reviewed and denied for cause
Denied claims cannot be resubmitted, but CAN be appealed
http://electronichealthreporter.com/differences-between-a-rejection-and-denial-in-medical-billing/
Denial Reviewed and Action TakenAppeal, Resubmit with additional information, Transfer, Write-off
Provider Notified with Reason for DenialAuthorization, Coding, Documentation Eligibility, Late Filing, Routing
Claim Reviewed and Denied Technical Medical Necessity
Registration/ Checking for eligibility and verification of insurance
Duplicate Claims
Experimental, Investigational, Non-covered benefit
Incorrect Claim Data
Lack of Medical Records
Lack of authorization
Medical Necessity
Medical Coding
Late filing
COB
Bundled services
• Gross charges denied by payors amounts to 15% - 20% of the nominal value of all claims submitted
• According to CMS estimates, claim denial rates could skyrocket by 100% to 200% in the early stages of ICD-10 implementation
7%
52%28%
13%
Payor Denials by Type
MedicalNecessity
Technical
Authorization
Documentation
Hospital Type
BedsAnnual Billings
from Patient
Treatment
Estimated Annual Denials Cost @
15%
Community 185 $63 M $9.5 M
Teaching 480 $660 M $99 M
Health System 1,100 $2,610 M $391.5 M
https://www.humanarc.com/wp-content/uploads/2013/06/HOSPITAL-DENIALS-WHITE-PAPER-by-Holly-Pelaia-2013-05.pdf
Understand the basis of the denials
Calculate your institution’s denial rate
Assess your team’s remit and outcomesAppeals only, or tasked with case management?
Able to respond to all denials ?
Increasing numbers of write offs?
Trend in the turnover rate
Understand the process
Know your data and review it quarterly
Cardinal rule of denial management is to address every denial as soon as you get it.
Track and define denials and keep record of the tracking
Catalogue denial by type, payor, billed charges and expected reimbursement
Denial Task Force
Interdepartmental meetings -
Improved timeliness and effectiveness of response
Integrate technology between clinical and revenue cycle process areas for enhanced communication
Monitor write-offs
Monthly meetings with payers http://www.ucop.edu/ethics-compliance-audit-services/_files/webinars/4-9-15-denial-management/denial-management.pdf
Accelerate the denials management process
Many facilities lump all rejected and denied claims into one basket
A detailed denial report is essential in determining causation and process problems
Facilitate improvements being implemented in the Revenue Cycle Management process
Rejected EDI Claim
+ Payor Denied Claim
+ Underpayments
Total Claims
Minimizing denials through an effective concurrent review and notification process
Recovering as many denied dollars as possible through an aggressive appeals process
Effectively closing the loop between approval and payment
Using data to identify key drivers of denials, and developing processes to mitigate these drivers, thereby further reducing denials
GovernmentMedicare (RAC, CERT, QIO)
Five levels of appealRedetermination
Reconsideration
Administrative Law Judge
Medicare Appeals Council Review
Judicial Review by District Court
Medicaid – usually one appeal level per audit
Commercial - different appeal levels available
www.beckerhospitalreview.com/.../has-it-can-t-eliminate-medicare-appeals-backlog
In-house modelFixed headcount
Competing responsibilities
Variable number of denials that may impact the ability to appeal 100% of the claims
Outsourced modelAvoids fixed headcount costs
Flexibility to appeal 100% of denialsPay for services needed
Quick response time reduces write offs
Provides a level of expertise that may not be available internally – potentially higher overturn rate
Allows the management team to focus on other areas in the revenue cycle
Becker Hospital Review.com/finance/outsourcing
Overturn rate and how the rate is calculated
Type of software / IT platform utilized and the extent of security measures in place
Evidence of adherence to best practices
Reporting capabilities, including root cause analysis
Accessibility and flexibility
Contractedrates
Actual payments
Net revenue after cost of collection
http://www.ucop.edu/ethics-compliance-audit-services/_files/webinars/4-9-15-denial-management/denial-management.pdf
124
609
1500
0
200
400
600
800
1000
1200
1400
1600
1800
AutomatedDenials
ComplexDenials
MedicalRecordsRequests
Activity through3Q15
Activity through4Q15
Activity through1Q16
Source: AHA (April 2016). RAC Trac Survey
Region Percent of Hospitals
Nationwide
A 15%
B 19%
C 40%
D 26%
www.cms.gov
$867
$5,451
0
1000
2000
3000
4000
5000
6000
AutomatedDenials
ComplexDenials
Average Dollar value
Source: AHA (April 2016). RAC Trac Survey
Average Dollar Value of Automated and Complex Denials per Participating Hospital by Region
RAC Region
Automated Denial
Complex Denial
National $867 $5,451
Region A $604 $5,322
Region B $1,756 $4,562
Region C $818 $5,759
Region D $605 $5,645
Source: AHA (April 2016). RAC Trac Survey
79%
33%
5% 5% 8%12%
7%
0
10
20
30
40
50
60
70
80
90
All Activity Q3 2015
All Activity Q4 2015
All Activity Q1 2016
Source: AHA (April 2016). RAC Trac Survey
42%
72%
51%
0
10
20
30
40
50
60
70
80
Denial Rate Appeal Rate Appeal OverturnRate
Source: AHA (April 2016). RAC Trac Survey
51
27
2018
9
0
10
20
30
40
50
60
providedaddl. Inf.
Care foundto be Med.Necessary
Underreview
RAC error Other
Implement a Denials Management process
Review the results of this process quarterly
Appeal immediately!
Educate your team
Denials Management may not be glamorous, but the process supports a “Fortune at the Bottom of the Pyramid!”
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