Reducing Revenue Leakage: An Important Role for Outpatient CDI

One category of denials where outpatient CDI can help is medical necessity denials.

EDITOR’S NOTE: Colleen Deighan will conduct the Talk Ten Tuesdays Listener Survey on CDI today as she concludes her series on outpatient CDI.

Developing a successful and effective outpatient clinical documentation integrity (CDI) program is a unique process for each healthcare organization. The volume of outpatient visits is much greater than in the inpatient setting, making it important to recognize that each organization will have different opportunities and priorities. 

With the broad scope of outpatient settings, documentation integrity efforts need to be focused on specific areas, such as Hierarchical Condition Categories (HCCs), evaluation and management (E&M) assignment, or observation services. When program expansion is being explored, consider how outpatient CDI can assist with reducing revenue leakage via denial management efforts. 

A denial is a claim received for processing by the payer wherein the entire claim or a charge item on the claim is determined to be unpayable. Denials result in increased accounts receivable, as well as increased write-offs or non-payment, and denials are very costly to collect. It’s estimated that 10 percent of claims are denied, and 90 percent of those denials are preventable.

Denials can be grouped into two types: avoidable denials and unavoidable denials. Some examples of avoidable denials are medical necessity denials, incomplete or missing documentation denials, or timely filing denials. An example of an unavoidable denial is an additional request for documentation. Both avoidable and unavoidable denials are preventable.

Taking the time to analyze and trend denial data and develop strategies for denial prevention switches things from a reactive process to proactive process, and towards getting the claim paid the first time it is submitted. 

There is a standard set of denial reasons most payers utilize to communicate to the healthcare provider the root cause. As part of the denial analysis, you will want to group your denials data by category. Top denial categories include registration, authorization, medical necessity, documentation and coding, and provider enrollment.

Next steps include mapping out the revenue cycle workflows and finding the causes of the denials so that effective solutions can be implemented. It’s answering three basic questions:

1. 1. What’s the problem?
   2. Why did it happen?
   3. What can be done to prevent it from happening again?

Denial management takes a collaborative approach from multiple departments within a healthcare organization to be impactful. One category of denials where outpatient CDI can help is medical necessity denials.

The Centers for Medicare & Medicaid Services (CMS) defines medically necessary services as “services or supplies that are proper and needed for the diagnosis or treatment of a patient’s medical condition, are provided for the diagnosis, direct care, and treatment of the patient’s medical condition, meet the standards of good medical practice in the local area, and aren’t mainly for the convenience of the patient or the physician.” Outpatient clinical documentation integrity specialists (CDISs) can collaborate with providers to ensure that clinical documentation completely supports the necessity for medical services.

Denials caused by documentation and coding errors is another category that outpatient CDI can assist with root-cause analysis to determine where education, training, edit creation, and technology optimization can help.

Collaborative denial prevention efforts will positively promote submission of clean and accurate claims that result in reduced administrative burden and proper payment for services provided.

Programming Note: Listen to Colleen Deighan report this story live today during a special, 60-minute edition of Talk Ten Tuesdays, 10 Eastern.