As claim denials increase, providers should change their workflows and practices to reduce denials and receive accurate payments more promptly, according to Michael E. Berger, Director of Revenue Cycle Operations, Management and Performance Improvement Services at Parente Randolph, LLC.
Berger, the presenter at a Health Care Compliance Association webinar, noted that payment denials by third-party payers have tripled over the last decade and may amount to 10 percent of a facility's gross revenue. He suggested that all providers institute denial reduction programs. A denial reduction program can improve the quality of care and increase revenue.
To reap the benefits of denial management, the organization must commit staff time and resources. In addition to a designated leader, the facility must have a permanent multi-disciplinary working committee including the health information management or records department, access management, internal auditors, patient financial services, senior management, senior medical staff, and contract management.
A single database must contain all relevant information, and all departments must use standardized definitions of codes and services. The database must be flexible to allow searches based on many variables, including: the 28 common “high-level denial codes,” admission and discharge dates, denied days, service area, admitting physician, date of each remittance, admitting and discharge diagnoses, payer code/financial class, revenue codes, procedure codes, and patient type.
By searching denials across many variables, revenue managers can use the data to identify common reasons for denials that can be remedied. For example, one facility experienced a sudden increase in denials for breast cancer services based on a lack of prior authorization. The facility had begun to provide immediate follow-up examinations rather than scheduling a second visit after an abnormal mammogram. In this case, the facility was required to contact the payer for authorization before proceeding with a second examination.
CCH Chicago Bureau, Sept. 3, 2008
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