In the current healthcare environment, hospitals need to capture every dollar from their payers, and as quickly as possible.
The retrospective war against denials is often a losing proposition for hospitals because the burden of proof is on the provider, and once the payer finally agrees to pay what they should have in the first place, cash collection is often significantly delayed. As a result, providers must become more aggressive in preventing and reducing denials moving forward, and rely less on retrospective appeals.
Denials can be separated into two categories, administrative and clinical, and the best way to handle them is through proactive measures. Below are key tips for providers to win the battle on denials:
Overhaul patient access processes. Technical or administrative denials are difficult and cumbersome to handle. The good news is that providers can put a process in place to prevent them from occurring at all. This entails identifying weaknesses in the system, fine-tuning processes – or overhauling them if necessary – and ensuring that patient access staff understands and plays their important role in the organization's financial success.
Hospitals should focus on obtaining all authorizations and referrals up front in order to avoid issues later. Patient access staff should be educated about required authorizations and how to make sure obtained authorizations match the services physicians are providing. If there are additional services to consider or if the authorization is significantly different from the service performed, there should be a process in place that allows staff to go back and obtain the necessary approval before or immediately after the procedure.
Evaluate and revamp patient satisfaction policies. Hospitals need to consider the financial consequences of their actions, particularly in the area of patient satisfaction. In many cases, providers avoid patient dissatisfaction at all costs. As a result, they often accept patients that come into their facility with the wrong authorization in order to avoid losing that patient to another provider or extend patient wait time as the correct authorization is obtained.
Although patient satisfaction is extremely important, the financial risks of this type of narrow policy can far outweigh the benefits as it often results in the accumulation of outpatient denials. Providers need to take a hard look at how much money they are losing due to technical denials and then work strategically to come up with processes that save money and do not drastically reduce patient satisfaction.
Focus on physician education and compliance. Clinical denials are based around proof that the patient is sick and if the care given is medically necessary. At the end of the day, battling clinical denials comes down to physician compliance: Physicians must move the patient through the most efficient process of care, use the correct location of care and, most importantly, carefully document all of these details. It must be made very clear to the utilization management or UM agents (on both the provider and payment sides) exactly how sick the patient is.
Many physicians are not aware of how significantly clinical denials can affect a hospital's revenue stream, underscoring the need for education on this topic. Providers should share the denial rate and net dollar impact with physicians to get their buy-in and then spend time educating them on the importance of documentation and compliance.
Think beyond recapturing revenue. Perhaps more important than recovering lost revenue from existing denials is determining the root cause of the problem and changing processes to prevent and reduce further denial volume. Hospitals can identify holes in processes and pinpoint delays among revenue cycle staff through business intelligence data and act accordingly.
The right business intelligence solutions allow one to obtain reports of denial activity by payer, physician, diagnosis-related group (DRG) or CPT code, and registrar to assist with denial prevention. For example, by arming oneself with a list of administrative denials by outpatient service area, one can more easily understand which registrars and physicians are struggling with authorization requirements and focus on
mentoring those individuals.
Caitlin Zulla is vice president of managed care services for MedAssets' Revenue Cycle Services division. She is responsible for overseeing the operations of the Silent PPO, Underpayment, Retrospective Appeal and Lost Charge Recovery services. She also worked as a decision support analyst in the Managed Care office of Atlantic Health System.
Topic: