Current denial trends call for integrated solutions and data analytics

Fighting denials can feel like a Sisyphean task. Although the diagnoses most often targeted for denials remain familiar—such as sepsis and malnutrition—payers’ denials reasons and strategies are constantly evolving. It’s easy to feel overwhelmed and bogged down, which isn’t helped by fragmented and siloed approaches to denials management.

Everyone knows it doesn’t have to be that way. But how do you get there? And what does it really take to shift to a data-driven, integrated denial avoidance program?

There’s no getting around the fact that it takes an initial investment of staff and technology, says Monica DuBois, RHIA, vice president of coding solution technology at DeliverHealth. However, that doesn’t mean it’s an unrealistic goal: taking even small steps can have a big impact. Making more effective use of the technology and data you have and strengthening relationships with colleagues in payer contracting departments or physician advisors can pay off in a big way. Those gains will, in turn, help build the case for more substantial investments and move toward a more proactive denial avoidance program.

Data crunching

“Revenue integrity is really about avoiding denials,” DuBois says. “And the only way to avoid them is to first look at the data in a way that you can analyze it, apply it to root causes, and work on optimizing processes at every phase of the revenue cycle.

Start by looking at data with an eye to understanding how it can help you avoid denials, Du Bois recommends. For example, an analysis of denials data might reveal an increase in duplicate charges, missing pre-authorizations, or non-covered services. Those are all examples of denials that could easily be avoided by optimizing systems and applying user feedback to drive improvements. Perhaps scheduling staff are missing pre-authorization requirements because they’re not easily visible in the scheduling system. Or errors in the way a charge was set up or linked is causing it to duplicate. Once those fixes are in place, they can be added to the internal audit plan for a follow-up audit in six months. With the root cause addressed, those denials will be avoided in the future.

Smarter edits

Claim edits can be a solution or they can be a problem, DuBois says. In general, claim edits have become more pervasive; while they’re necessary to ensuring clean claims, edit fatigue can become a problem. In addition, many edits require a depth of specialized knowledge to solve and can be labor-intensive. In today’s current staffing situation, a plethora of highly specific edits could easily create bottlenecks that fuel late claims and missed timely filing deadlines.

Address this problem by keeping edit fatigue and staffing in mind and making edits smarter, DuBois advises. Partner with the IT department to create rules-driven smart edits that bypass the need for human touch.

For example, HCPCS code J2912 (injection, sodium chloride, 0.9%, per 2 ml) is a common subject of edits. J2912 often appears on same-day surgery claims; J2912 itself usually represents about $30 in reimbursement, but the surgery could be $50,000 or more. Although it’s a simple edit, it could easily trap the claim in an edit queue.

One organization DuBois worked with solved this scenario by creating a smart edit that automatically added modifier -GC as appropriate. This allowed the organization to get these claims out the door and stop holding up thousands of dollars of compliant revenue for what amounts to small change.

An eye on contracts

Knowing your payer contracts has become critical to addressing and avoiding denials. Payer contracting often siloed from other revenue cycle functions. Leaders in other revenue cycle areas, including revenue integrity, rarely have good insight into the details of payer contracts.

One problem is that traditional approaches to denial management focus on Medicare to the exclusion of other payers. That may have made sense in the past, but as payer mixes shift to include more Medicare Advantage and managed Medicaid, and commercial payers employ increasingly sophisticated strategies to reduce or deny earned revenue, that won’t work now, according to DuBois.

“Back in the day, our mentality was we just [handled] everything as we would for Medicare and [other payers] just needed to comply,” she says. “That’s not how it is anymore at all. It’s a different world.”

Bring payer contracting staff on board denial management to discuss payer-specific trends and concerns, DuBois says. Payer contracting staff may be able to shed light on contract terms or provide resources that explain how a particular payer expects diagnoses and services to be documented, coded, and billed. Share denial data and payer performance scorecards with payer contracting and explain how contract terms and conditions play out in real life and affect revenue. With this information, and clear data to back it up, payer contracting staff will be positioned to negotiate better contracts.

Face forward

With those lessons in mind, start the new year off on the right foot by taking the first steps to transition reactive denial manage to proactive denial avoidance. Although making the change isn’t as simple as flipping a switch, the investment will pay off in improved compliant, complete reimbursement and more efficient use of staff. Those are both critical long-term benefits.

“I think fundamentally the healthcare industry is still managing denials pretty manually in a reactive state,” DuBois says. “But the reactive state requires a ton of labor, which is not necessarily readily available and is expensive.”

The ideal person to lead this change is someone who’s comfortable working with multiple departments to solve problems and focuses equally on people, processes, and workflows, DuBois says. Denials affect every part of the revenue cycle and the day-to-day tasks of everyone working in the revenue cycle. By seeing denials through a holistic, data-based lens, revenue integrity can make practical changes that boost efficiency and stop denials before they happen.