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PwC Updated Messaging Managing Denials in Large Health Systems HFMA - Texas Gulf Coast Chapter June 16 th , 2017

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Page 1: Managing Denials in Large Health SystemsPwC Managing Denials in Large Health Systems 4 Gathering Information Developing Effective Appeals The Future of Revenue Leakage Building Infrastructure

PwC

Updated Messaging

Managing Denials in Large Health Systems

HFMA - Texas Gulf Coast ChapterJune 16th, 2017

Page 2: Managing Denials in Large Health SystemsPwC Managing Denials in Large Health Systems 4 Gathering Information Developing Effective Appeals The Future of Revenue Leakage Building Infrastructure

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Presenting Today

2

James Gaffney – Manager, Revenue Performance Management

James is a Manager in PwC's Health Industries Advisory Practice. James focuses on Strategy and Operations within the Healthcare Provider space. He has deep subject matter knowledge within the Revenue Cycle, where he focuses on centralization, workflow efficiency, technological enhancements, financial clearance, AR management, denial management, and patient experience. Jim has worked with several nationally recognized health systems, health insurance companies, and revenue cycle services firms.

Currently, Jim is working on a Revenue Cycle transformation project for a large health system in Texas. James utilizes a data-driven approach to problem solving along with strategic and creative thinking to develop customized solutions for his clients. Recent clients include Memorial Hermann Health System, Medstar Health, Advent International, Conifer Health Solutions, and Texas Health Resources.

Jim lives in Chicago with his fiancé and shelter mutt Theo.

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Executive Summary

Page 3

Page 4: Managing Denials in Large Health SystemsPwC Managing Denials in Large Health Systems 4 Gathering Information Developing Effective Appeals The Future of Revenue Leakage Building Infrastructure

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Managing Denials in Large Health Systems

4

Gathering Information

Developing Effective Appeals

The Future of Revenue Leakage

Building Infrastructure and Accountability

PayerPerspective

Denial Management

and Prevention

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The Challenge

5

Source: 1. Modern Healthcare2. HFMA – Creating a Healthy,

Unified Revenue Cycle3. Health Care Compliance

Association – HIPAA & Revenue Cycle Compliance: A New Approach to Denials Management

Most health systems

lose between 3 and 5 percent of

their net revenue as a result of payment denials1

The cost of denials makes up an

estimated 20% of revenue cycle expenses2

90% of denials are preventable3 when feedback from denials management is implemented with associated departments

As there are other less obvious sources of revenue leakage, preventable denials must be stopped.

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Scope of the Challenge

6

At 3-5% of NPSR, the State of Texas is leaving $2.3B on the table as a result of denied claims. And this doesn’t even include the cost of working these denials. But we have clients that are operating as low as 0.12% denial write-offs.

Source: FY16 PwC Consortium Benchmarking Data

$255B Gross

$76.5B* NPSR

$2.3B left on the table

*Assumes 30% net to gross

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Why so much $$$ left on the table?

7

✓ Too much data, not enough information

✓ Decentralized/dispersed accountability

✓ Informal processes around the prioritization of prevention initiatives

✓ Informal status reporting and progress monitoring processes and tools

✓ Triaged by denials team with little feedback to the functional area that owns the underlying root-cause process error

✓ Increased pressure on payers to meet regulatory and reporting requirements

✓ Appeals researched and worked by staff with other competing responsibilities

✓ Separate reporting by entity

• Simply managing denials does not correct the problem. Instead, organizations must prevent denials. Every time a claim gets denied, dollars leak from the Texas healthcare ecosystem (foregone revenue and additional organizational spend).1

Big Picture:

Source:1. AHIMA – Don’t Deny the Denials

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Gathering Information

Page 8

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Take advantage of the data available to see the bigger picture and drive workflow

9

Understanding financial impact is broader than initial denials and write-offs. Other metrics to be monitored include:

Billing edits Denial root causes

Payer rejections Denial overturn rates

Appeal Team work-in-process (WIP)

Regardless of the data point(s) used the remediation process should follow the same process:

Data

Analyze relevant denial data by payer, reason, service, etc.

Identify Trends

Look for similar issues across line item

details, payers, etc.

Isolate

Isolate systemic issues and identify root

cause(s)

Prioritize

Prioritize issues with the biggest financial

impact

Resolve

Process solutions through enterprise-wide change request

channels

Implement

Champion process changes among

impacted staff in all locations

Follow-up

Monitor ongoing claim activity to validate process

changes

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Denial write-offs impact the bottom line, other metrics provide early indicators are costly to resolve

10

Claim edits and rejections Initial denials Denials Work in Progress Denial Write-Offs

Source:Bill Scrubber

Source:Posting system or

analytics tool

Source:Workflow tool or

denials managementsoftware

Source:Patient Accounting

System

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Transparent reporting – CARC and RARC code based taxonomy

11

One of 300+ Claim Adjustment Reason Codes (CARC) code helps organizations tie a denial category to a specific service / department.

CARC Description Denial Type Department Denial Category1 Deductible Amount Information Patient Liability Patient Liability

2 Coinsurance Amount Information Patient Liability Patient Liability

3 Co-payment Amount Information Patient Liability Patient Liability

4The procedure code is inconsistent with the modifier used or a required modifier is missing. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Modifier

5The procedure code/bill type is inconsistent with the place of service. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Procedure

6The procedure/revenue code is inconsistent with the patient's age. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Procedure

7The procedure/revenue code is inconsistent with the patient's gender. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Procedure

8The procedure code is inconsistent with the provider type/specialty (taxonomy). Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Procedure

9The diagnosis is inconsistent with the patient's age. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Diagnosis

10The diagnosis is inconsistent with the patient's gender. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Diagnosis

11The diagnosis is inconsistent with the procedure. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Diagnosis

12The diagnosis is inconsistent with the provider type. Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Coding Diagnosis

13 The date of death precedes the date of service. Preventable Billing Claim Error

14 The date of birth follows the date of service. Preventable Billing Claim Error

15 The authorization number is missing, invalid, or does not apply to the billed services or provider. PreventableFinancial Clearance

Authorization

16

Claim/service lacks information or has submission/billing error(s) which is needed for adjudication. Do not use this code for claims attachment(s)/other documentation. At least one Remark Code must be provided (may be comprised of either the NCPDP Reject Reason Code, or Remittance Advice Remark Code that is not an ALERT.) Note: Refer to the 835 Healthcare Policy Identification Segment (loop 2110 Service Payment Information REF), if present.

Preventable Billing Missing Information

18Exact duplicate claim/service (Use only with Group Code OA except where state workers' compensation regulations requires CO)

Information Duplicate Duplicate

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Transparent reporting – Visually trend data to more easily find patterns and prioritize work

12

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Memorial Hermann Initial Denial Dashboard Demo

13

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Focus on prevention

14

Denial Type

Non-coveredService

Missing Documentation

Untimely Filing

Ineligible on Date of Service

Missing Authorization

Duplicate Claim

Coordination of Benefits

Invalid CPT or HCPCS Code

Lo

wH

igh

Med

ium

Pr

ev

en

tab

ilit

y

Probability of Collection

Low Medium High

Source: 1. HFMA

Fixing the root cause of denials has a much larger financial impact than overturning them.

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Denials can have various root causes that require different remediation strategies

15

1) Work with the offending departments and physicians to help them understand the impact and improve the ordering process

No Authorization

/ Pre-Certification

Authorization not obtained

Authorization obtained for the wrong service

Authorization obtained for part of the service

Contract issue -authorization

requirements?

Procedure was changed after scheduling

Denial Reason Root Cause

1) Determine if visit information was received/ received timely.

2) Examine authorization workflow for breakdown.

1) Examine the order to determine if the authorization obtained matches the order.

2) Determine if the PAR obtained an authorization for the wrong service.

1) Examine the order to determine if the authorization obtained matches the order.

2) Determine if the PAR obtained an authorization for the wrong service.

1) Review payer contract to see if an authorization is required.

2) Update the logic that the preregistration team uses to determine when an authorization is needed

Remediation Strategy

15

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Root Cause Mapping Examples

16

Denial Category Root Cause Report Distribution/ Feedback Loop Suggested Corrective Action

Coordination of benefits

Service is the result of an injury Pre-Service Center Identify screening process error and fix

Covered under spouses insurance Pre-Service Center Identify screening process error and fix

Patient had other commercial insurance Pre-Service Center Identify screening process error and fix

Primary payer has not paid Billing Determine why secondary went out before primary paid

Payer priority changed Pre-Service Center Identify screening process error and fix

Primary EOB not sent to secondary payer Billing Determine why primary EOB was not sent

MSPQ Needed - Medicare remains primary Pre-Service Center Identify screening process error and fix

MSPQ Needed - Medicare no longer primary Pre-Service Center Identify screening process error and fix

Missing/ incorrect patient informationPatient information entered incorrectly Scheduling, Pre-Service Center

Determine why pre-service did not identify error or scheduling exception

Patient information not captured Scheduling, Pre-Service CenterDetermine why pre-service did not identify error or scheduling exception

Missing/ incorrect billing information

Value/ occurrence/ condition code error Billing Identify billing process error and fix

Charges submitted on incorrect form Billing Identify billing process error and fix

Billed with incorrect NPI Billing Identify billing process error and fix

Payment included in allowance for another service Billing Identify patterns to preempt requests

Invalid date span Billing Identify billing process/ interface error

Split bill required Billing Identify patterns to preempt requests

Charge issue - missing/ invalid modifier Hospital Business Office, CDM Coordinator Identify charge process error and fix

Charge issue -revenue code error Hospital Business Office, CDM CoordinatorDetermine if the charge is on the CDM correctly or if there is a charge entry error

Charge issue -HCPCS/ CPT code error Hospital Business Office, CDM CoordinatorDetermine if the charge is on the CDM correctly or if there is a charge entry error

Member not eligible for service

Patient did not have valid insurance Pre-Service Center Identify screening process error and fix

Change in patient/ insurance information - Patient Pre-Service Center Identify screening process error and fix

Change in patient/ insurance information - PSC Pre-Service Center Identify screening process error and fix

Procure was experimental/ not covered Hospital Business Office, Clinical DepartmentIdentify screening process error and fix, monitor for patterns

Patient was not eligible for the procedure Pre-Service Center Identify screening process error and fix

Payer issue Managed Care Address at regular payer meetings

Insurance coverage terminated

Patient not eligible on DOS Pre-Service Center Identify screening process error and fix

Patient not eligible for the entire stay Pre-Service Center Identify screening process error and fix

HX plan premiums have not been paid Pre-Service Center Identify screening process error and fix

Payer issue Managed Care Address at regular payer meetings

Maximum benefits

Modifier error Hospital Business Office, CDM CoordinatorDetermine when modifier should be added during charge entry

Service maximum Pre-Service Center Identify screening process error and fix

Global maximum Pre-Service Center Identify screening process error and fix

Patient has another insurer Pre-Service Center Identify screening process error and fix

Payer issue Managed Care Address at regular payer meetings

Pre-existing conditionGrandfathered plan Pre-Service Center Identify screening process error and fix

Coverage gap loophole Pre-Service Center Identify screening process error and fix

Root causes should be assigned to each denial as it is being working to provide insight to the responsible parties about suggested corrective actions.

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Transparent reporting – The evolution to predictive analytics

17

Data Analytics and Benchmarking

What happened?

Root Cause Analysis

How and why did it happen?

Predictive Modeling

What will happen if this changes?

Proactive Decision Making

What is the next best action?

Traditional Approach

Future Approach

Source: 1. HFMA

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Identifying claims with high potential of being denied and reviewing the claims before sending them to payers will significantly reduce the denied claims

Claims

Submit to Payer

Claims scored for denial risk using a predictive model

Claims prioritized by denial risk and claim

amount

Low risk claims

Review and edit claims in order of priority

High risk claims

Adjudication Outcome

Feedback to continuously improve the model

Predictive models flag claims with high chances of denial more efficiently than traditional business rules. Probability of denial also helps prioritize claims for reviews which helps target

high impact claims first18

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Building Infrastructure and Accountability

Page 19

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So how do we prevent these denials

20

• Joint operating councils (cross-functional) to provide feedback to payers, managed care, and departments

• SWAT teams for prevention• Aggressive appeals• Managed care strategy

• Embrace it, don’t hide it• CARC and RARC code based

taxonomy• Visually trend data to more

easily find patterns and prioritize work

• Proactive management/analytics

• Formalized feedback processes and tools

• Formalized management of prevention initiatives

• Escalation processes for initiative road-blocks

• Centralized initiative status reporting

• Formally chartered, cross-functional teams

• Formalized processes • It starts at the top - CFO• Accountability that flows

through the organization

Culture of Accountability

Focus on Prevention

Payer Relations

Transparent Reporting

It’s the fundamentals - Successful denials prevention is pegged to successful implementation of 4 fundamental strategies

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Culture of accountability – Formally chartered, cross-functional teams

21

Denials Governance

Denials Prevention Denials Recovery Denials Support

• Rev Cycle leadership• Vice Chairs of each Rev Cycle functional area• Representation from IT, Denials Reporting, Denials

Project Support, payer contracting, & clinical representation

Responsibilities:• Denial root cause research• Accountability assignment

and work planning• Communication with

major payers• Implementation of

prevention projects• Monitoring, review, and

report outs to governance

Responsibilities:• Denials appeal• Denials follow up • Denials closure (rebilling,

write-offs, or next responsible party)

Responsibilities:• Denials Reporting

Denials categorization maintenance

• Denials trending analysis

• Prevention project implementation support

• Develop denial Key Performance Indicators (KPI’s)

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Analyze Data Segment Data Identify Root Cause Prioritize

Monitor & Review

Implement Fix

Identify Prevention

Strategy

Charter Prevention

Team

22

Analytics & Reporting Team (ART) works with Denial Recovery staff to identify homogenous root cause denials

ART conducts further research to validate underlying root causes for each denial

Segments are prioritized for prevention based on net revenue loss, net write-offs / recovery ratio, and resource requirements

A leadership sponsor is assigned to each project and a team is assembled with representation from appropriate functional areas

The prevention team works with functional areas to execute the project workplan Multiple prevention

projects launched simultaneously

Data is monitored to ensure success of intervention

Denials Recovery staff sample accounts to validate initial segmentation and adjust as necessary

Data AnalysisPrevention

Implementation

LEGEND:

The prevention team collaborates to identify a People, Process, or Technology fix and draft the project workplan

Culture of accountability – Formalized processes

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Focus on prevention – Formalized feedback processes and tools

As denials are reviewed and root causes are identified, formalized processes and tools ensure they get to the right step along the claims journey.

Patient Access / Clinical Departments / Medical

Records

Patient Accounting System Rules

Billing Rules Initial Denials and Write-offs

Long-term Process Fixes

Short and Long-term Stops and

Technology

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Focus on prevention – Formalized management of prevention initiatives

24

The file is organized by process phases

Root cause outlined for each segment

Each reason code divided in to homogenous segments

A Denials Management Repository tracks denials prevention initiatives through their multiple phases and serves as an enterprise-wide knowledge base for denials.

Progress monitored

on ongoing basis

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Culture of accountability – Collaborating with Partners

25

Memorial Hermann - Net Denials

with UT Attending Physicians

Denial Category Jan - Sep 2016 Annualized

Billing Scrub 1,148,981 1,531,975

Medical Necessity 1,136,873 1,515,831

No Authorization 1,918,888 2,558,517

Process Issues 2,660,477 3,547,302

Provider Liable 1,314,293 1,752,391

Total 8,179,512

Change in Denial AR 533,671

Ttl Adj & Chg in AR 8,713,183

Mischer 667,187

Total 8,045,996 10,727,995

Denial Category Definition

Billing Scrub Medicare Outpatient Medical Necessity

Medical Necessity Level of Care - Denied After Billing / Appeal

No Authorization Auth Missing or Does Not Match Service Provided

Process Issues Coding, Timely Filing, Charging, Etc

Provider Liable Level of Care - Found Prior to Billing

Memorial Hermann has hundreds of University of Texas Physicians (UTP) that practice at MH facilities. MH is dependent on these physicians to obtain authorizations, follow clinical protocols, and provide timely and thorough documentation in order to get paid on claims.

MH started tracking denials associated with UT Physicians on a separate scorecard. Meetings with UTP Revenue Cycle leadership focused on trends and specific physicians that may need additional education.

The overall reaction has been positive. Many of the physicians were appreciative to have the information and a better understanding into how to prevent denials them in the future.

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Culture of accountability – Clinical Collaboration

26

Medicare Documentation Requirements –HBO Specific:• Signed physician orders.• History of present illness to include clinical documentation of diagnosis; symptoms supporting the medical necessity of services (including, if applicable, wound grade classification per Wagner Scale).• HBO progress notes (including measurable signs of healing).• HBO Treatment Log with documented length of treatment time.• Results of all testing/services billed.• Documentation of physician attendance and supervision of HBO therapy.

58%21%

8%

4%

3%2%

1%1%

1%

1%

Wound Care Denial by Service

Hyperbaric OxygenTherapy

Non Coded Charges(supplies, pharm, room,etc)

Surgical Procedures -Integumentary System

Visit Level

Skin Substitute

Physical Medicine andRehabilitationEvaluations

Surgical Procedures -Musculoskeletal System

Treatment of wounds using hyperbaric oxygen therapy is provided at multiple sites across Memorial Hermann. Clinical documentation was routinely requested and the claims were subsequently denied. This feedbackwas provided to the Skin Council where the denials prevention team helped the group determine that 1) there were disconnects in the clinical application used and the legal medical record 2) Critical outside medical records not being included with the submitted clinical documentation 3) Staff at the point of ROI did not have the experience or knowledge to understand the documentation requirements

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Culture of accountability – Helpful tips

27Source: AHIMA

1

▪ Utilize automation to route denied claims to a staff’s worklist

▪ Develop a denial management guide with detailed policy and procedures for employees (i.e. how to assign manually recorded denials to the appropriate denial code, how to appeal by denial type, etc.)

▪ Provide periodic refreshers to educate staff on payer trends, updates in the insurer’s requirements for resubmitting claims, etc.

▪ Utilize a write-off approval process with established dollar thresholds and management level approvals

▪ Implement a formal escalation process by denial type and dollar value for when staff need to resolve an issue or receive a response from a department (i.e. provide an example of the escalation process)

▪ Perform root-cause analysis to determine needed process changes and /or educate departments to prevent future denials

▪ Enable employees to work denials more efficiently by providing technology and training to effectively work denials

2

3

4

5

6

7

8 ▪ Establish automated adjustments for low dollar denials and analyze using reporting to reduce denial costs

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Claim Processing and Denials from the Payer Perspective

Page 28

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Payer Claim Processing Inputs

29

Paym

ent

Inte

grity

Checks

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Evolving payer operating environment and challenges impact the dynamics and output of claims processing; an issue in any one of the dimensions can trigger a delayed payment or denied claim

Technology

• Significant investments in technology to automate and support all major functions

• Increasing transparency internally and externally

• Leveraging big data and advanced analytics solutions to support strategic as well as tactical decisions

Claims Processing

• Delays in claims processing more often than not are due to an issue associated with the configuration of an input (enrollment, plan design, network, medical management, etc.) and not the claims processor itself

Post Payment Reviews and Reconsiderations

• Payers are seeing an increasing need to enable provider transparency into reconsideration processes

• Tools exist, but implementation from payer to payer varies

• Plans required to collect individual level premiums in high volume

• State exchanges may have unique processes and regulations

• Medicaid expansion plans may layer on additional unique and differing processes/regulations

Medical Management

• Employers and government demanding utilization management services

• Evolving population health programs

• Changing rules around authorization and medical necessity; made more complex by number of plans and employer groups

• Aging systems and conflicting rules

Managing Provider Networks

• An accurate provider contracting and credentials database is required for accurate adjudication of claims

• Shift towards narrow networks is increasing the complexity

Challenges in Enrollment

30

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Various factors increase the complexity of a claim and can be potential causes of denials

Finance

• Member copay• Threshold (by payor) for manual

review• Multiple insurers• Primary vs secondary insurer• Non-traditional insurer as primary• Non-traditional insurer as secondary• HMO vs PPO• Government vs Commercial

Coding

• ICD codes• DRGs• MDCs• External cause code• Unspecified codes• Combination of codes• Unusual code for a particular payor• Severity of DRG (CC/MCC)• Presence of modifiers

Patient

• Newborns• Age• Gender• Relationship with guarantor• Deceased• Location

Billing

• Total claim amounto Outlier within DRGo Absolute amount

• Time between service date and claim filed

• Length of stayo Outlier within DRG

• Authorization• Bundling / unbundling of services

Physician / Hospital

• Hospital/Health System• PCP• Specialty of referring physician• Attending physician• Admitting physician• NPIs• Historical denial rate of the provider• FWA rate of historical claims from the

provider

Rx

• NDC code• Unit of Measure• Combination of drug and diagnosis• Number of prescriptions• Combinations of drugs• Units & frequency of drugs• Drug cost• Type/class of drug

31

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Collaborating with payers to reduce communication barriers and increasing transparency will help in resolving denied claims; learnings of which need to be transmitted to pre-submission process

PayersProviders

• Providers tend to treat disputed claims as an A/R problem

• Providers typically provide a Patient Reference Number or similar attribute.

• Providers tend to take a higher level view of the claim.

• Payers tend to treat disputed claims as a claims processing issue

• Payers use Claim Number and Member ID to find and research claims

• Payers are very focused on the denial reasons and mechanical details of the claim

Both parties have challenges with accounting for what is in play, what has been resolved, what is

pended, and how items should be prioritized.

Resolutions

Lower cost

Higher cost

✓ Formal legal proceedingsvia an arbitration or litigation with accompanying formal discovery protocols. Can be high risk

✓ Informal mediation using a third party that gathers data from each side, helps establish the facts to help both sides prepare for a settlement discussion.

✓ Dedicated SWAT teams are assigned well defined claim populations and resolve them in short sprints. The exercise is sandboxed to simplify tracking

✓ Joint operational teams meet periodically and exchange information and spreadsheets with an aim to resolving inventory of contested claims

Most common barrier to resolution of contested claims is that payer and provider teams are seldom on the

same page during the process

32

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Case Study

33

4.60%6.01%

4.80%5.90%

4.20% 4.23%5.68%

4.41%3.10%

4.11%

0.58% 0.60% 0.64% 1.27% 1.27% 1.40% 1.53% 0.83% 1.17% 0.75%

0%

2%

4%

6%

8%

10%

12%

14%

Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 Jul-16 Aug-16 Sep-16 Oct-16

Commercial Plan Denials YoY

2016 Denial Rate 2016 Write-off Rate 2015 Denial Rate 2015 Write-off Rate

2015 Q2 2015 Q3 2015 Q4 2016 Q1

66.4 29.9 16.6 13.4

2015 Q2 2015 Q3 2015 Q4 2016 Q1

79.3 42.0 33.4 20.8

Commercial Average Days to Close Denials

Medicare Advantage Average Days to Close Denials

Henry Ford Health System met with one of it largest payers monthly to resolve claims processing issues through edit configurations and process improvements to reduce the administrative burdens for denial issues related to:• Non-covered services• Coding• Authorizations/referrals

The focus of the meetings were to:• Identify denials with high

overturn rates to put waivers in payer adjudication system

• Understand the reason behind common denials so edits could be added to the claim scrubber

• Understand the information needed in an appeal to expedite the reconsider process

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Developing Effective Appeals

Page 34

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Remember there is someone reading your appeal letter…

35

Appeal letters should be well organized and to the point to help the reviewer on the other end understand the case you are making. If they cannot follow your logic, they will not have grounds to overturn the denial.

Critical data elements:1) Basic information to identify the case (e.g. patient name, claim #, dates of service, etc.)

2) Restatement of the denial reason – if you are unsure, call the payer. This understanding is critical to crafting a successful response.

3) Clear statement of disagreement as to why you think the denial was made in error or why you think an exception should be made.

4) Clear supporting evidence proving the error (e.g. eligibility screenshot, contract language) or making the case for the exception (e.g. medical records, clinical evidence).

5) Contact information for the review to get in tough with you.

Dos:• Provide a brief summary of the situation to provide context and orient the reviewer.

• Answer the phone if the reviewer calls. They have limited time to review and are likely looking for additional information.

• Limit what you send in. Include only relevant documentation. If the reviewer cannot find the supporting information in the 1000 page medical record easily, you will not win the appeal.

Don’ts:• Be a jerk. Remember people are emotional

creatures.

• Be arrogant and make statements without evidence to support it.

• Quit after one appeal, if you believe you are correct. Exhaust your appeal rights.

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Strategies based on denial types

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No prior authorization:• Ask for a retroactive authorization (the success of this will vary based on payer)• Explain circumstances that would have prevented the provider from obtaining an

authorization• Ask for reconsideration based on the fact that the treatment was medically justified and

a covered benefit

Missed admission notification window:• Explain the circumstances that would have prevented the provider from notifying the

payer. Many of these cases are emergent:• Patient did not have their insurance card in the emergency room• Patient was incapacitated

Patient not eligible on date of service:• Explain the circumstances that would have prevented the provider from obtaining

eligibility information• Provide proof that the payer indicated that the patient was eligible (screen shot, 277

transaction, etc.)

Non-Covered Services:• Determine if the denial is due to a medical necessity issue or a benefit exclusion

• Benefit exclusions have little recourse, but can generally be billed to the patient• Non-covered as not medically necessary should follow the strategies for medical

necessity denials

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Strategies based on denial types (continued)

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Medical Necessity:• Understand on what basis the claim is being denied as not medically necessary. The

appeal argument and clinical document to support the service should address the specific medical necessity issue to be successful.

• Send only the clinical documentation necessary to support the appeal argument. Flooding the payer with a 1000 pages of medical records that date back to 2003 will only hurt your case. Remember reviewers have productivity quotas and must be able to justify why they are overturning a denial.

• Cite specific criteria or clinical evidence to support the treatment that can be verified.

Experimental or Investigational:• Experimental denials are not hopeless• Work with clinical departments to understand the reason why they chose the treatment.

They may have clinical evidence to support the treatment.

• Do research on clinical evidence to supportthe treatment on databases such as PubMed

• Request an external review by a like specialist,it is the legal right of providers.

• Even if the appeals are not successful, at leasteducate the clinical department about the cost

0%

5%

10%

15%

20%

25%

30%

35%

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

Experimental Denials at Cancer Center

Denials Overturn Rate

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Strategies based on denial types (continued)

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Medically Unlikely Edits (MUEs):• MUEs are part of the National Correct Coding Initiative (NCCI) edits most commonly

applied by Medicare• If you are getting MUE or other NCCI edits from commercial payers, review your

contracts and provider manuals to determine their appropriateness• Some procedure to procedure (PTP) edits are common, but generally not all

NCCI edits are applied by commercial payers• Understand what type of MUE the claim is denying for:

• MAI 1 – Single Line Edit: Each line item is adjudicated separately based on units of service for this line item• If providers feel the units are correct, bill any units above the MUE limit on a

separate line item with an appropriate modifier (e.g. 76, 77, LT, RT, 91, 59) • MAI 2 – Date of Service Policy Edit: Limits on units billed per date of service

based on absolute criteria such as anatomical considerations• Edits here are likely clerical errors

• MAI 3 – Date of Service Clinical Edit: Limits on units billed based on clinical benchmarks. Units over MUE rare and unlikely• These denials will require appeals

• Radiosurgery is an area that frequently triggers MAI 3 edits

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The Future of Revenue Leakage

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The shift to value is a less obvious source of revenue leakage. As denials for episodic care become less relevant, the focus will shift. In the meantime, providers must operate in both worlds.

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As reimbursement continually shifts away from fee schedules, percent of charges, and per diem rates towards alternative payment models, documentation because increasingly more important. 50% of Medicare payments will be tied to alternative models. As CMS goes, so goes the market.

Source: PwC Health Research Institute analysis, Centers for Medicare & Medicaid Services

Impacts of Documentation:

• Coders are only allowed to code what is documented by the physician . Missing or poor documentation can result in lower paying DRGs and a lower case mix index.

• Quality scores are based on coded data stemming from documentation. Reimbursement tied to quality scores could be in jeopardy if quality scores are not accurately reported.

• Ongoing patient care is impacted by unclear or misinformed providers leading to higher total cost of care. Needing to repeat exams or tests also lead in increasing

2016

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Questions

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