Denials Management for Hospitals – Headaches and Solutions

Hospitals continue to bleed out revenue loss due to denied claims. $262 billion in claims are initially denied with an estimated 63% recoverable bringing denials management for hospitals into play as a key revenue recovery focus. What is going on, and how can hospitals solve these issues?

Malissa Powers and Sabrena Gregrich writing for AHIMA (American Health Information Management Association) observe: “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. 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.”

When you dig down further into the denials management for hospitals problem, you learn how, “payers are requesting larger volumes of records for Healthcare Effectiveness Data and Information Set (HEDIS) and risk adjustment purposes, placing unprecedented demands on HIM staff. There seems to be a fallacy that minimal effort is involved in producing health records within an electronic environment. Furthermore, many payers are now requesting direct access to the electronic health record (EHR), a controversial issue from both a data management and privacy/security perspective.”  This insight, also from the AHIMA article is followed up with some solution examples:

 “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.”

Insurance Companies and Government Continue to Frustrate Denials Management for Hospitals

Are emergencies actually emergencies? Anthem says no and denies some claims.  Moves by Anthem could reshape how payers increase denials. “Nearly one in six emergency department visits by commercially insured adults could be denied coverage if all commercial insurers adopted Anthem’s policy to potentially deny coverage of unnecessary ED visits,” reports Health Leaders Media editors. This from a study published in JAMA Network Open by researchers at Brigham and Women’s Hospital. The article continues, noting that “the researchers studied ED visits of more than 28,000 commercially insured patients and found that Anthem’s list of non-emergent diagnoses would classify coverage denial for 15.7%, or 4.6 million ED visits annually.”

And government related denials resulting from new policies and decisions don’t seem to be slowing. In an article on “Hospital Outpatient Denials Looming,” at JDSupra, the authors warn that “Beginning in July, 2019, the Centers for Medicare & Medicaid Services (CMS) will direct Medicare Part A/B Macs to perform claim validation edits and return all claims to hospital providers if the address included on their claim forms do not exactly match the information included in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) system. Any discrepancy, such as the difference between the use of “Road” vs “Rd” or “Suite” vs “Ste” on a claim, may mean a return to the provider of claims for services provided in hospital outpatient sites of service. This could result in millions of dollars in claims being returned, and an obvious delay in payment.”

What can hospitals do?  Revint has a complete suite of solutions that often involve an experienced interim Director of Revenue Management to get denials under control.  When it comes to denials management for hospitals, Revint has developed a large practice to support our Hospital and Physician Practice clients.  This includes account follow up to resolve and appeal denials; and support to verify insurance and mitigate insurance coverage related denials.