New Year’s Resolution: Decreasing Denials with Proactive Tactics

The cost to appeal is worth the claim reimbursement and modification of payer behavior.

As we approach 2022, one of our new year’s resolutions should be to do what’s necessary to decrease denials. We know that payers and external auditors took a break during the pandemic, but now it’s open season for audits and denials.

Let’s consider some focused strategies to limit our denial exposure in 2022.

Know What’s Being Targeted

Obtain data from patient financial services (PFS). PFS should be able to tell you what the top 10 denial categories are for your organization. Watch your Program for Evaluating Payment Patterns Electronic Reports (PEPPER) for indications of variant patterns of your facility versus other organizations. Also, visit your Recovery Audit Contractor’s (RAC’s) and other RACs’ websites to understand what they are targeting. For professional practices, look at any Comprehensive Error Rate Testing (CERT) reports. Then convene a task force that includes health information management (HIM), coding, PFS, and other relevant departments to identify potential process modifications or education opportunities to reduce denials.

Common targets include the following:

  • Diagnosis specificity: Be certain that your clinical documentation improvement specialists (CDISs) know the targets and channel their initiatives and physician education on these conditions;
  • Lack of clinical indications for certain conditions: Understand each payor’s rules, know which model (i.e., Milliman or InterQual) they use, and discuss the requirements and fiscal impacts with your physician advisors and medical staff leadership and related clinical departments (i.e., imaging, nutrition); also, provide education at any physician forums available; and
  • Medical necessity: Ensure that your case management team, CDISs, and clinical leadership are fully aware of payor and RAC targets, and ensure that the clinical documentation supports the service, level of care, and place of care.

Payer Denials

When we receive a payor’s denial we don’t agree with, we need to aggressively and logically appeal – every time! Remember, payors are incentivized to deny claims that delay or eliminate payments. You must know your payor contracts. You need to be persistent and argue by providing compelling reasons supported by your patient records. If need be, pursue every level of appeal available to you. We need to establish a reputation with the payor of not laying down and letting them walk all over us.

Determine if you have grounds for an appeal by first researching the payor’s rationale for the denial. If the payor erroneously misinterpreted the clinical process, contract, or rules related to the service, prepare a compelling defense by:

  1. Providing concrete proof that you are entitled to the payment;
  2. Using the opportunity to present information that was incorrectly interpreted or wasn’t considered by the payor’s initial reviewer; and
  3. Ensuring that the appeal is based on a payor’s misinterpretation, not your error.

Your appeal should clearly state what was done for the patient and how your organization complied with your organization’s contract with the payor and the payor policies, such as obtaining a pre-authorization, notifying the payor within the timeframe required, providing copies of records with the claim, coordinating with their case management personnel, etc.  Follow the IRAC process:

IRAC (Smartt 2020) — Issue, Rule, Analysis, and Conclusion

  • Issue – Clearly Identify the reason for the denial and address it;
  • Rule – Lay out the rule(s), statute, or policy that apply to the denial and demonstrate what you did for the patient or why the payor can’t enforce their denial; be certain to know your state statutes relative to payor behavior;
  • Analysis – Give a detailed analysis that demonstrates how what was done for the patient followed the payor’s procedures, patient care protocols, community practices, and national/specialty standards; provide excerpts of the medical records that support what was done; and
  • Conclusion – Demand the payor review and overturn their denial.

Documentation Submitted

Many organizations have delegated documentation submission to PFS. Reconsider this delegation. Collaborate with PFS to delineate when documentation may be submitted by PFS staff versus when the submission should be by the denials management or coding appeals team.

Any documentation provided should have valid signatures, dates, and plans of care consistent with the services provided. This is particularly important when providing documentation for physician/professional service claims and denials.

When It’s Time to Call in the Troops

If your organization is doing what’s needed to ensure that your documentation supports the care provided and your payors or external auditors continue to deny for what seems to be excessive frequency, inappropriate reasons, or as a tactic to exhaust facilities or providers, you may need to pull in legal counsel. Be certain that the counsel has payer experience.

Ensure that you have collected data from your return to provider (RTP) documents, 835s, and 837s, which demonstrate that the payor is intentionally denying for invalid reasons or in contradiction of your contract. These trends will help your legal counsel build the complaint. If needed, complain to your state department of insurance and/or pursue a declaration of breach of contract for timely payment and/or payment of medically necessary services.

It’s time to be focused and aggressive. The cost to appeal is worth the claim reimbursement and modification of payer behavior. Be certain to monitor your progress and denial activity for positive results, and celebrate!

EDITOR’S NOTE: For more on this topic, please see other articles written by Rose Dunn and which have been posted on ICD10monitor.

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Rose T. Dunn, MBA, RHIA, CPA, FACHE, FHFMA, CHPS, AHIMA-approved ICD-10-CM/PCS Trainer

Rose T. Dunn, MBA, RHIA, CPA, FACHE, FHFMA, CHPS, is a past president of the American Health Information Management Association (AHIMA) and recipient of AHIMA’s distinguished member and legacy awards. She is chief operating officer of First Class Solutions, Inc., a healthcare consulting firm based in St. Louis, Mo. First Class Solutions, Inc. assists healthcare organizations with operational challenges in HIM, physician office documentation and coding, and other revenue cycle functions.

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