Mastering Claims Denials and Winning Appeals

It has been four years since the COVID-19 pandemic began, and the healthcare industry is still grappling with spiraling costs and declining revenue streams. This is further complicated by the increased difficulty in generating and keeping the hard-earned revenue needed for survival. Claims are being processed slower, healthcare providers are waiting longer for payments, and denial rates have spiraled out of control. In short, the industry is not in a new normal but at a crossroads.

The Ultimate Playbook for Mastering Claims Denials and Winning Appeals How denials are contributing to the ongoing healthcare crisis

The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

Introduction It has been four years since the COVID-19 pandemic began, and the healthcare industry is still grappling with spiraling costs and declining revenue streams. This is further complicated by the increased difficulty in generating and keeping the hard-earned revenue needed for survival. Claims are being processed slower, healthcare providers are waiting longer for payments, and denial rates have spiraled out of control. In short, the industry is not in a new normal but at a crossroads. According to a study published by the American Medical Association in January 2023, the dollar value of denials increased by 67% in 2022 compared to the previous year. Furthermore, a recent study conducted by a revenue cycle analytics company revealed that the initial denial rate for over 1,700 hospitals monitored by its software platform has reached 11%. This translates to 110,000 unpaid claims for an average-sized health system. According to CMS data, U.S. healthcare spending reached $4.5 trillion (about $13,500 per person) in 2022. Based on these numbers, it is easy to determine the financial repercussions of denied claims on the healthcare industry. This is even more concerning given that healthcare expenses are estimated to increase at an average rate of 5.4% annually over the next decade. If this trend continues unchecked, it will cause irreparable harm to the healthcare industry and ultimately put patients at risk. In simple terms, providing services without correct payment is economically unsustainable. It’s well known that hospital closures are becoming more commonplace, which begs the question of whether these closures could have been avoided if hospitals had received the revenue they were rightfully owed.

In other words, to what extent are claims denials contributing to the healthcare crisis we are currently facing?

This comprehensive guide dives deep into the complexities of appeals and denials and offers ideas how to navigate them toward a more financially stable future for the healthcare industry, ultimately benefiting both providers and patients.

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Continuous Quality Improvement

PLAN

ACT

STUDY

Continuous Quality Improvement (CQI) is at the core of successful claims denial strategies. CQI is a structured and ongoing process that helps identify problems, implement changes to resolve them, monitor the effectiveness of the changes, and make adjustments to ensure better outcomes in the future. It is recommended that readers examine various CQI models to determine the most suitable one for their organization. This can be time-consuming, consulting with organizations with CQI expertise can be beneficial. One such model is PDSA (Plan-Do-Study-Act), or the Deming Cycle. It is a four-stage problem-solving approach that is particularly useful for claims denials.

What are you trying to accomplish? How will you know that a change is an improvement? What changes can you make that will result in an improvement? In applying PDSA, ask these questions:

After each complete PDSA cycle, the effectiveness of the change is evaluated, and necessary adjustments are made before repeating the next cycle to ensure the change is successful and sustainable. Organizations naturally become more efficient and successful as they integrate CQI into their culture.

CLICK HERE

To learn more about the PDSA cycle as it relates to claims denials,

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

The Danger of Silos

“For healthcare organizations to survive, their stakeholders must work together to safeguard and defend revenue, as no single person or department can do it alone. The non-siloed model is the future of patient care.”

Silos pose a significant threat to healthcare organizations, particularly when it comes to claims denials. These silos can often remain unnoticed for long periods of time, and stakeholders may be oblivious to their existence. When organizations operate in silos, they miss out on the collective knowledge and problem-solving skills of experts across the organization. The first step to overcoming silos is to acknowledge their existence. By breaking them down, organizations can focus their brainpower, control claims denials more effectively, and prevent revenue loss. Claims denials are complex and multifaceted issues that cannot be solved by a single person or department alone. To tackle this problem effectively, it is important to identify and collaborate with the right stakeholders in an organization who can leverage their diverse expertise and perspectives. The key is maximizing each person’s contribution by leveraging their strengths to achieve a synergistic outcome greater than the sum of its parts. While this paper primarily focuses on the roles and responsibilities of specific stakeholders such as HIM, CDI, and Case Management, it is important to recognize all stakeholders within an organization who can be part of the solution for claims denials, including Physician Advisors, IT, and Patient Financial Services. It is advisable to create a map of the route a denial takes in a specific organization to identify all stakeholders involved, as they may vary between organizations. An often-overlooked department that can help fight claims denials is Payor Contract Management. Contract renegotiations between healthcare organizations and payors are common, but if these changes are not communicated to all key stakeholders by Contract Management, the organization is at increased risk of claims denials. For instance, if Patient Registration is not informed about contractual changes in the process of obtaining prior authorization from a patient’s health plan before providing a service, it can lead to prior authorization denials. Similarly, the Utilization Review team should be informed of any changes in the cadence of required continued stay reviews to avoid medical necessity denials.

Clearly, a cross-functional team working together towards a common goal can achieve better results faster than if the same people work independently without

frequent communication. However, the road to organization-wide collaboration is challenging and requires committed, forward-thinking individuals willing to invest time and determination. Despite the challenges, the long-term benefits of achieving collaboration across the organization are invaluable. To have a successful claims program, healthcare organizations must harness their power and work smarter than ever before.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

Lifecycle of a Inpatient Claim

PRE-REGISTRATION Captures insurance data

Verifies insurance & eligibility Verifies patient demographics Obtains prior authorization Helps prevent prior authorization denials

REGISTRATION Re-validates patient demographics Verifies prior authorization was obtained Ensures timely notification of admission to payor Helps prevent prior authorization denials

CASE MANAGEMENT Verifies that patients meet medical necessity for inpatient status Performs timely, accurate, and thorough initial assessment and continued stay reviews Provides accurate information to payors Maintains compliance with mandated continued stay review frequency Helps prevent medical necessity denials

CLINICAL DOCUMENTATION INTEGRITY (CDI) Assures provider documentation reflects the patient’s clinical picture Helps prevent clinical validation, medical necessity, and coding denials

HEALTH INFORMATION MANAGEMENT (HIM) Maintains compliance with official coding guidelines Assures coding is supported by clinical documentation Submits clinical documentation queries Assures coding is performed to the highest level of specificity Helps prevent coding and clinical validation denials

PROVIDERS Provides care based on conditions and disease processes Assures accurate and timely clinical documentation Prevents clinical validation denials

BILLING Resolves edits Timely claim submission Accurate payment posting

APPEALS Monitors incoming denials

Ensures timely appeals Tracks appeals outcomes Adopts a zero tolerance policy for avoidable write-offs Helps prevent future denials through stakeholder education

Helps prevent technical denials from errors or omissions on claim form

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Denial Strategies Each healthcare organization has a unique way of handling claims denials. This approach may have evolved organically or been strategically planned over time. In some instances, it is a combination of both. If you had to use only one word to describe your overall denial strategy, would it be proactive or reactive ? Organizations have traditionally adopted a reactive approach, processing denials as they come in and striving to meet appeal deadlines. However, this approach is resource-intensive, with numerous people involved with each denial, leaving little time for analyzing data, education, learning from past mistakes, and creating a long-term strategy. As the number of denials increases, hospitals must be vigilant to avoid being overwhelmed and missing appeal deadlines. Missing a deadline could result in an automatic loss. Therefore, it is vital for hospitals to find ways to be more efficient and effective in managing claims denials. Managing claims denials proactively involves identifying and addressing the root causes of denials before they occur. This strategy relies on data analytics, benchmarking, and trending to predict denials and mitigate risks. It also requires periodic auditing and educating stakeholders on strategies that help prevent future denials. Organizations can avoid repeated mistakes by learning from past denials. Continuous monitoring of emerging regulatory and payor trends is essential. This proactive approach results in fewer denials and lower costs associated with appeals. Most importantly, it translates into more revenue for providing high-quality patient care. Implementing a proactive denials management strategy requires an investment of time on the front end while continuing to process retrospective cases and meet appeal deadlines. Once a proactive denials management program is in place, a culture of continuous quality improvement takes root, involving stakeholders across the healthcare continuum. Eliminating denials is impossible, but every step closer to the goal where prevention measures outweigh reactive responses means greater financial stability for your organization. In other words, the best defense is a good offense.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

Four Pillars of Success

To achieve maximum revenue recovery from denials, it’s essential to have the right elements in place, including people, processes, and technology.

PEOPLE Denials Prevention: A cross-functional team of experts from various departments is needed to prevent denials. This team should operate in lock step with those tasked with managing existing denials, consistently communicating denial trends and appeal results, sharing best practices and lessons learned, exchanging data, and developing educational materials. If your organization does not have a denials task force, it would be an exceptional achievement to take the lead on establishing one by assembling the right stakeholders from across the organization, as outlined in the “The Danger of Silos” section of this guide. Denials Management: Having the right talent with the necessary skills and knowledge is crucial for timely and effective denial management. A backlog can lead to revenue loss that could have been avoided, so it is important to prioritize aging denials by date and dollar value to ensure that appeals are submitted on time, and none are left behind. If an organization struggles with a backlog of denials or lacks staff to handle appeals, seeking external assistance is wise, as it will likely yield a significant return on investment. PROCESSES Well-defined, easy-to-follow processes are necessary for success, especially in complex areas such as claims denials. Every step in the process is significant. If any step fails, the revenue related to that denial is at high risk. Therefore, processes must be adaptable and flexible to keep up with the changing healthcare landscape. It is advised to periodically review current processes to ensure they are part of the solution and not the problem, meaning they are functioning optimally and not outdated. Here are a few tips: • UNDERSTAND YOUR CONTRIBUTION: All stakeholders must understand their roles, responsibilities, and impact on their organization’s financial health. • UNDERSTAND THE URGENCY: Everyone involved with denials should understand that every second counts due to the limited time available for appealing denied claims and recovering lost revenue. • UNDERSTAND THE JOURNEY: Map the current flow of denials through your organization to ensure each denial is categorized correctly and quickly routed to the appropriate department responsible for its resolution. • UNDERSTAND THE CHALLENGES: Identify inefficiencies in your process, such as bottlenecks or misrouting of denials to the wrong department and resolve them promptly. This is crucial to avoid missing the deadline for filing an appeal due to expired time limits. You should never lose the chance to appeal a denial by default because it reached your department after the filing date. • COLLECT THE DATA: Create guidelines for the standardized collection of denials and appeals data, including root causes, trends, volume changes, and appeals outcomes. This data is a valuable source

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

of information for prevention and is necessary for tracking your organization’s key performance indicators (KPIs). • REPORT REGULARLY: Establish a regular cadence, such as monthly, for reporting to all stakeholders. • ANTICIPATE CHANGE: Stay current on regulatory and payor trends to effectively manage the claims denials process. A denials task force can help with knowing when to pivot strategy. • REVIEW & RECALIBRATE: Changes in your denials processes should not be a one-time event but a continuous effort that requires constant monitoring and evaluation. While celebrating positive outcomes, learning from mistakes or shortfalls is equally important. Each setback provides valuable insights that can guide future improvements, making it essential to have evergreen processes in place. TECHNOLOGY Denials and appeals data provide the roadmap to win the revenue battle. This data is foundational to establishing and revising benchmarks, tracking process improvements, focusing auditing efforts, and developing stakeholder education. To effectively capture, synthesize, and report, it’s necessary to have dependable tools. It is important to present data in a clear and concise manner, avoiding any unnecessary complexity, ambiguity, or clutter. The main objective is to motivate stakeholders to engage with the data, as increased engagement will contribute to greater organizational success. Making complex information easy to understand is a rare and valuable skill that differentiates thought leaders. It’s essential to balance the needs of your audience when creating data presentations. Some prefer a high-level overview, while others want more granular detail. Numerous technology options are available to meet various budget requirements. If you are on a tight budget, software-based applications like Sheets, Excel, and Power BI are accessible for gathering, calculating, analyzing, and summarizing data as well as tracking appeal deadlines. Healthcare organizations and providers should keep watch on an emerging technology that leverages artificial intelligence, data aggregation, and predictive analytics to simplify denials management and forecast the likelihood of denials before claims are submitted. Although this technology is not widely adopted, it holds immense potential for preserving and recovering revenue.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

EDUCATION

Regular education on trends, best practices, and lessons learned is vital to prevent repeated mistakes and stop revenue loss from denials and failed appeals. For instance, if a patient’s insurance claim is denied due to a missing modifier, the patient accounts department can fix the issue by adding the missing modifier and submitting the claim again. However, this process is inefficient and time-consuming as it must be repeated for every claim in the future. A better solution would be to learn from this mistake, communicate the error with the team responsible for the initial application of the modifier (such as HIM/Coding), provide relevant education, and verify compliance with follow-up quality checks. This will significantly reduce the number of future denials of the same type and the workload of other departments. Educating adults requires a unique approach, and the educator is encouraged to research adult learning principles. One overarching tenet is that adult learners are motivated to learn when they understand the “why” and will often want to know:

• What’s in it for me?

• Why do I need this information?

• Why does this information matter?

• How can I use this information in a practical, tangible way on the job?

• How will it make me a better worker or professional?

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Common Types of Denials

There are numerous causes of claims denials, but we will concentrate on these common types: PRIOR AUTHORIZATION DENIALS: Occur when payors deny claims due to a lack of pre-authorization or timely payor notification. MEDICAL NECESSITY DENIALS: Occur when inpatient criteria are not being met, the emergency department is misused, an inappropriate level of care/services is provided, or there is a lack of documentation to support medical necessity. CODING DENIALS can occur due to:

•

Code sequencing issue

• Incorrect MS-DRG or APR-DRG (diagnosis-related group) assignment • Incorrect principal or secondary diagnosis code(s) • Unsubstantiated CC/MCC or SOI/ROM • Incorrect procedure code(s)

•

Truncated codes (missing characters)

•

Missing or incorrect modifiers

• Incorrect present-on-admission (POA) indicators • Coding unsupported by clinical documentation

Another potential reason for coding denials is the use of cloned documentation (existing text that has been copied and pasted into a new location in the electronic health record). This documentation may or may not be relevant to the current encounter, and coding staff should be trained to ascertain the difference. To maintain the accuracy and integrity of the health record, it is recommended to conduct focused audits on cloned documentation. CLINICAL VALIDATION DENIALS: Occur when a payor determines that there is insufficient clinical evidence to support a reported condition, despite the presence of documentation in the patient’s record. This often occurs when payors use criteria that differ from providers. Beware of Untimely Appeals When dealing with complicated issues such as revenue loss due to denials, it’s best to prioritize and resolve more straightforward problems first. One such problem is untimely appeals, which occur when an appeal is submitted after the payor’s deadline has passed, resulting in an automatic denial. The payor assumes that no response from the organization indicates agreement with the denial. Revenue losses due to untimely appeals can be reduced by improving response times. While it may be possible to request an extension in some cases, doing so is risky. Even if the extension is granted, payment may be delayed, negatively impacting the organization’s cash flow. Common reasons for untimely appeals include:

√ Silos √ Staffing shortages √ Outdated or inefficient processes √ Misrouting of appeals to the wrong department √ Overwhelming volume of denials √ Lack of tracking tools √ Systems upgrades/conversions

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

Utilizing software to log denials and track appeal deadlines, accessible to all stakeholders, is a relatively simple solution for delayed appeals. Should a backlog exist, an organization can either require staff to work overtime to meet the demand or seek the help of an external entity that has a track record of success. It’s crucial for organizations to have a zero-tolerance policy toward preventable revenue loss and allocate whatever resources are needed to prevent it.

Solutions by Job Function

In the following section, we will explore how Case Management, CDI, and HIM can provide effective solutions for various types of denials.

Case Management

• Case Managers have a unique role in helping prevent Prior Authorization Denials. As the

• When it comes to Medical Necessity Denials , Case Managers play an important role in prevention by performing timely, accurate, and thorough continued stay reviews, providing the correct information to payors, and being proactive in preparing for upcoming reviews. On the individual level, the medical necessity process begins at admission and then at regular intervals with continued stay reviews. The frequency of the continued stay review is determined by hospital policy, with varying cadences for different payors. For example, a hospital may require daily reviews for Medicare patients, but commercial payor reviews may be required every other day. The continued stay review provides the documentation that the patient still meets inpatient hospital level of care.

primary point of contact with insurance companies after patients are admitted and initial reviews are conducted, they are among the first to know about breakdowns in the admission authorization process. First, a denial will occur if no prior authorization was obtained. Second, even if prior authorization was obtained, it may result in non-payment if the admission authorization was submitted to the payor after the deadline. Case Managers can work with the department responsible for obtaining admission authorizations to help streamline the process and prevent future prior authorization denials from occurring.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

Clinical Documentation Integrity (CDI)

• CDI professionals are a front-line defense against Clinical Validation Denials. To perform their job effectively, they must possess a thorough understanding of standard, evidence-based clinical definitions. This knowledge is necessary to challenge payor decisions that deny claims based on their own clinical validation criteria. It is known that payors do not always apply clinical validation criteria consistently, which can lead to nonsensical and unjustified claims denials. In addition, CDI professionals can help ensure their organization’s clinical definitions are accurately reflected in the health record and updated with advancing medical science, such as the definition of sepsis. Lastly, CDI professionals must stay informed of those diagnoses at their organizations that are most frequently denied by payors and educate themselves and stakeholders to prevent future denials. • CDI is a valuable partner for Case Management in helping prevent Medical Necessity Denials through their work in assuring that clinical documentation is precise, consistent, thorough, and accurately reflects the patient’s clinical picture.

CDI professionals equip Case Management with the necessary information to justify medical necessity to payors. This collaboration between the two departments is a classic example of symbiosis.

Health Information Management (HIM) Coding Denials , when used strategically, can help healthcare organizations stabilize their revenue. Although it may seem counterintuitive, coding denials are valuable because they provide a roadmap to prevent future denials and minimize revenue loss and write-offs. The first step in the process is to analyze the root causes of coding denials. This analysis helps identify patterns, trends, knowledge gaps, and process inefficiencies. Based on this analysis, solutions can be developed, such as process enhancements and education initiatives to upskill the workforce with industry best practices. Communicate coding denials, appeals outcomes, and financial consequences to the coder of record. This strategy is not intended to be punitive but rather a preventative measure to identify areas that need further education and who would benefit from it. Once denial patterns have been identified, conduct targeted audits on a sample of accounts to better understand the underlying reasons. This enables appropriate measures to be taken to correct the problems identified and prevent future denials. It is worth noting that these audits may reveal that the problem lies with the payors and their unfair denial practices rather than the healthcare organization itself.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

HIM Thought Leadership Formal leadership roles are not a prerequisite for being a thought leader. In fact, not all recognized thought leaders in an organization should necessarily hold leadership positions. One such example is the coding professional, whose detailed perspective naturally positions them as thought leaders in denials prevention. People support what they help create, so the involvement of an organization’s coders is crucial to winning the revenue battle.

Frontline workers often have a better understanding of the intricacies of their jobs than leaders whose role is to take a more global view.

Here are some tips that leaders can use to engage their coding staff in the claims denial strategy. These tips can also be used by coding professionals who are not in leadership roles to become valuable contributors to their organization’s efforts to reduce claims denials.

√ Ask coders for feedback on how to improve denial rates.

√ Share coding denial trends with coding staff to increase awareness. √ Involve coders in the appeals process. √ Educate coders on their role in achieving clean claims.

√ Request feedback from coders on observed clinical documentation gaps or inconsistencies. √ Encourage coders to participate and have a voice in their organization’s denials task force.

Leverage Key Performance Indicators (KPIs) for Success Organizations rely on Key Performance Indicators (KPIs) to measure progress toward specific goals and track performance over time. KPIs play a crucial role in denials management, providing valuable insights into the KPI should be raised to reflect the progress made and establish a new baseline for future denials.

In addition, comparing an organization’s KPIs to industry benchmarks provides a more comprehensive understanding of its performance in a broader context. A KPI scorecard that tracks denials and appeals can be a game-changer for healthcare organizations. The scorecard should measure the performance of all departments that impact claims denials, such as HIM, CDI, and Case Management. Additionally, the data should be kept current and presented in a user-friendly format that encourages stakeholder engagement. If an organization doesn’t have one, stakeholders should take the initiative to create it.

effectiveness of processes and strategies. These metrics enable healthcare organizations to identify gaps and areas for improvement in real time, allowing for timely and informed course correction. With KPIs in place, healthcare organizations can proactively manage denials, optimize their operations, and improve the overall financial health of their organization. To remain effective, KPIs should be flexible and adaptable to keep up with an organization’s evolving operational reality and that of the healthcare industry itself. For instance, if an organization manages to consistently reduce the number of claims denials, the baseline for that

Let’s explore three important revenue cycle KPIs.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

CLEAN CLAIMS RATE A clean claim is one that contains no errors, includes all necessary information, and is paid by the insurer on the first submission without being returned to the provider for correction. To calculate the clean claims rate, divide the number of claims that meet the above criteria by the total claims submitted to payors. Include the clean claims rate and root cause trends of unclean claims on the KPI scorecard. Submitting clean claims upfront means more consistent cash flow and avoids additional costs associated with reworking claims.

Keys to Success:

• Regularly monitor your clean claims rate to quickly identify and resolve inefficiencies or problematic trends. • A positive variance in the clean claims rate may indicate successful process improvements or stakeholders learning from past errors and not repeating them.

• Conduct regular quality checks to ensure that there are no errors or missing data in the claims.

• Routinely validate that your claim processing technology is functioning optimally, fully updated, and accurately reports all key data elements.

• Educate stakeholders in understanding errors and their role in clean claims.

CLAIM DENIAL RATE The claims denial rate is the percentage of claims refused payment by insurers. As the number of denied claims increases, an organization’s financial situation becomes more precarious. Improving the claim denial rate is critical to maintaining a healthy revenue cycle. Create a claim denials dashboard that is part of a KPI scorecard.

Keys to Success:

• Stay close to your organization’s historical and current denials data. It provides benchmarks, trends, and other valuable information to make informed decisions about improving revenue performance. • Monitor the number of claim denials the organization receives and the impact on revenue. By regularly monitoring this data, you can easily identify emerging patterns or trends and take corrective action early on, either locally or enterprise-wide, before they escalate into more significant issues.

• An increase in denials could be a warning sign of shifting payor trends or emerging internal problems.

• A decrease may indicate successful outcomes from process improvements.

• The denials dashboard should categorize denials by type, such as medical necessity, coding denials, and clinical validation. Additionally, it should show the responsible department, financial implications, trends, and appeals outcomes. • Fix process-related roadblocks immediately, such as denials not reaching the appropriate department by the due date. It will be found money!

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

APPEALS SUCCESS RATE Tracking the percentage of denied claims that were successfully appealed and paid is a vital KPI metric. It helps in understanding which appeal strategies are effective, identifying ways to prevent future denials, and improving stakeholder education.

Keys to Success:

• Calculate the revenue loss from unsuccessful appeals and report this information on the KPI scorecard.

• Determine reasons for unsuccessful appeals and use these findings to prevent future denials.

• Closely monitor appeals lost due to missed deadlines and work to correct this immediately.

• Enhance stakeholder education by providing specific real-life examples of appeal outcomes, both successful and unsuccessful.

Denials Prevention Audits Healthcare organizations are facing grave financial threats from claims denials in the short and long term. Denial rates have increased sharply, making it difficult for organizations to manage them effectively. Moreover, unjustified, and nonsensical denials have become the norm, adding to the burden. This has created undue stress and diverted attention and resources away from critical prevention efforts. The traditional approach of handling denials as they occur is no longer sustainable. The appeals process is expensive and slow, negatively impacts cash flow, and, ultimately, can imperil an organization’s ability to provide patient care.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

The best strategy is to prevent denials before they occur. This requires having enough resources, a well-thought-out plan, educated stakeholders, and regular compliance audits. If budget constraints are a concern, calculating revenue loss from denials can help make the case for additional staff. To take immediate action, consider partnering with a vendor specializing in denials management and prevention. They can perform targeted audits, use advanced analytics to analyze audit data, and prepare a plan to prevent denials. This investment is likely to yield significant returns.

REFLECTIONS

• Is your organization’s audit plan specifically designed to prevent denials, not just manage them? • Does your audit plan include all key departments, such as Case Management, CDI, and HIM/Coding? • Is your audit plan customized to your organization’s specific denial trends and challenges? • Is your audit plan updated regularly to align with trends, regulatory changes & industry alerts? • Do all stakeholders have visibility into your audit results? • Do all stakeholders receive education on regulatory changes, OIG workplan changes, denials trends, and appeals outcomes? • Do you conduct follow-up audits after educating stakeholders to ensure they have understood and implemented new information?

AUDIT TARGETS

An organization should base its prevention audits on observed denial trends and known at-risk areas, such as:

• • • • • • • • • •

Medical necessity Clinical validation

Documentation integrity High-dollar procedures Error-prone DRGs and APCs

Error-prone diagnoses & procedures

HCCs

Diagnoses at-risk for miscoding

OIG Workplan targets

Recovery Audit Contractor (RAC) targets

• The Program for Evaluating Payment Patterns Electronic Report (PEPPER) data • NCCI edits • Modifier accuracy

It is best to convey the audit findings as educational opportunities that highlight the knowledge gaps identified in critical areas such as Case Management, HIM, and CDI. Sharing the results with all relevant stakeholders ensures that everyone is well-informed and can take necessary actions.

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The Ultimate Playbook for Mastering Claims Denials and Winning Appeals

Conclusion When faced with a complex problem, it’s wise to begin with the end goal in mind and define the desired outcomes clearly. In the case of claims denials, the focus should be on preventing as many denials as possible, and for those that do occur, being prepared to win the appeals. The goal is to minimize as much revenue loss as possible from claims denials. It’s crucial to take control of this situation to ensure the long-term sustainability of healthcare organizations to provide optimal patient care. As highlighted, HIM, CDI, and Case Management professionals have the skills needed to outsmart payors’ rogue denial practices and are among the heroes who can help save healthcare.

Here are a few takeaways:

√ Denials ultimately impact patient care. √ Many denials are preventable.

√ Past denials can help inform future success. √ Being proactive can bring about lasting change. √ Remember, you are part of the solution.

√ Creative, out-of-the-box thinking solves problems. √ Silos are the enemy of a healthy revenue cycle.

References https://www.beckershospitalreview.com/finance/293-hospitals-at-immediate-risk-of-closure.html https://deming.org/explore/pdsa/ https://www.health.state.mn.us/communities/practice/resources/phqitoolbox/index.html https://www.smartsheet.com/continuous-quality-improvement-healthcare

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For more information or a free consultation, contact us at:

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