By Susan Gatehouse, RHIT, CCS, CPC, AHIMA-Approved ICD-10-CM/PCS Trainer
The average cost of debunking a denial is $25 per claim, not to mention the continuous challenges associated with attaining timely payment. Reviewing denial management strategies on a regular basis may prove a more efficient payment journey.
Claim denials are a continuous challenge for the healthcare industry, as providers struggle with write-offs and the resources needed to manage them. Indeed, a well-thought-out strategy will improve claims’ financial performance; however, as the causes for denials continue to evolve in complexity, the strategy to combat denials should continually be assessed and transformed in order to remain effective. To ensure accurate payment from payers, providers need a strategy that addresses denials with a current, all-encompassing approach.
With a monthly barrage of claim denials, examining the root causes of delayed or non-occurring payment leaves an organization exposed to ongoing denials that could be remediated.
Ongoing evaluation to support accurate claims, produce fewer denials, and help prevent manual rework from denials is essential, and knowing where to focus improvement is key. Artificial intelligence (AI) and system automation flags for denials can be effective; however, if there are policies missed on the payer side, such as time restrictions, payer policy manual updates that do not coincide with an organization’s negotiated managed care contract renders automation ineffective. All aspects, from data accuracy to payer requirements, must be explored.
With a monthly barrage of claim denials, examining the root causes of delayed or non-occurring payment leaves an organization exposed to ongoing denials that could be remediated. In an effort to stay current with the reasons a payer denies a claim, identify disjointed organizational processes and educational needs. It is important to evaluate the source of non-covered services.
There is a myriad of reasons for a non-covered service denial. A few of the most common are inaccurate ICD-10 or CPT® codes, providing services that are not covered, and inaccurate or omitted information, which can occur at the front end of the revenue cycle. Denial information is powerful in identifying organizational challenges and creating transformational change. Creating awareness related to the direct or indirect cost of a denial, department-specific feedback, and recommendations for improvement allow for ongoing opportunities for identifying, securing, and remediation of reoccurring claim denial.
With the consolidation of many of the nation’s largest insurers, pharmacy benefits managers (PBMs), and specialty pharmacies into healthcare conglomerates, several health insurance companies now require certain medications to be filled by a third-party specialty pharmacy. Because these are often intravenous (IV) drugs that need to be infused by a healthcare provider, it requires hospital-based infusion clinics and physician practices to accept “white (or brown) bagged” medications.
“White-bagging” prohibits a provider from ordering and managing the handling of a drug used in patient care. Instead, a third-party specialty pharmacy dispenses the drug and sends it to a hospital or physician office on a one-off basis.
“Brown-bagging” is similar to white-bagging; however, in this instance, the third-party specialty pharmacy dispenses the drug directly to a patient, who then brings the drug to the hospital or a physician’s office for administration.
Providers are clearly impacted by certain payers ” bagging” mandates, as in many cases, providers are no longer able to seek reimbursement for these medications. Some payers have suggested that hospital-based infusion centers or physician practices might still be able to seek reimbursement for the administration of these medications. Often, providers learn about the payer implementation of these policies with little to no notice. Specific language prohibiting this practice may be used during payer contract negotiation.
An alignment between the payer and provider is sorely needed to promote the quality of the overall patient experience. Payers’ score cards, maintained by an organization, will aid in the cooperation between payers and providers. Tracking the range of payers’ patterns and measuring metrics such as denial reason, average time to pay, payer’s first response rate, and denial overturn rate can help providers better tailor improvements and determine root causes. This allows providers the necessary information related to prioritizing payers. This information may also prove useful during managed care contract negotiation or renegotiation.
As healthcare providers know, there is much variance in these measurements, from one payer to another, and understanding the particulars will provide tools to improve processes. Creating these “payer score cards” will help denial prevention and minimize manual rework.
Deploying a process for targeting denial prevention centered on current trends will significantly impact prevention. A successful RCM must shift into more actionable, targeted prevention to efficiently reduce denials. In short, denial prevention requires a new strategy.
Axea's CEO, Susan Gatehouse, is an industry thought leader in all aspects of healthcare revenue cycle management. Serving on the ICD10monitor Editorial Board, Susan Gatehouse has numerous articles you can explore on the ICD10monitor news site.