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Now that ICD-10 has been with us a while, the most frustrating tasks that hospitals are dealing with are claims denials. Whether for line items or entire stays, they present significant challenges as it pertains to revenue and resources. Does your facility have the proper process in place to handle denials so that losses are mitigated?

The best way that hospitals can accomplish this is to have a facility-wide approach that engages all concerned parties that answer the denials, plus tracking and preventing future denials.

Some key things to consider:

  • Know your targets. Be aware of the U.S. Department of Health and Human Services (HHS) Office of Inspector General (OIG) work plan, read industry newsletters, talk to peers at other facilities. Providers are still seeing a lot of denials for surgical DRGs and for MCC/CC cases. On the outpatient side, a lot of denials are being issued for lack of medical necessity or specificity in coding. Be aware of where your potential pitfalls lie.
  • A formal response process is necessary. You need to have a procedure in place so that denials are handled in an effective manner. Make sure denials are routed in a timely fashion to the responsible party who has the ability and authority to assess the denial and respond to it. When inpatient denials occur, if you disagree, be sure to write a comprehensive appeal, including citations from the record as well as pertinent guidelines. If the denial is more clinical in nature, enlist the help of your clinical documentation improvement (CDI) team or physicians in order to present a clearer picture of the patient’s condition. 
  • Quality audits are your best tool! Whether performed pre-bill or retrospectively, audits are the best way to identify each facility’s weaknesses and/or strengths. If you can perform second-level reviews on targeted DRGs, these are a great means for preventing denials and appeals. The second-level reviews help to make sure the documentation supports the diagnoses and/or procedures that are affecting payment before the claim goes out the door. Retrospective audits can help to track the efficacy of education performed or any new processes put into place. Audits also help to ensure that new coders or staff are performing their job correctly, according to the procedures at your facility.
  • Prevention should ALWAYS be your goal. Tracking and education helps ensure prevention. Tracking helps you see not only the issues are being denied, but also what those issues cost your facility. In assessing that, determinations can be made as to where to concentrate. Do you need physician education if your denials are medical necessity issues? Do you need an improvement in the process for clinic charging? Do you need to educate coders in areas you are seeing repetitive errors?  Identify what needs to be done to prevent future revenue impact.
  • Stay ahead of the game. Keeping abreast of guideline changes, code updates, and reporting requirements helps minimize denials. Ensure that your coders, charging staff, CDI team, and all necessary areas receive updates promptly. Knowledge is the key! 

The best thing facilities can do is come together as a team to address denials and identify what can be done to prevent them.


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