presents
Establishing a Lean Quality Approach
to
Denial and Appeal Management
Is the glass half empty…
…or half full?
The Staggering Cost of Denials
High denial rates impact both the
speed at which you get reimbursed
and the administrative costs
associated with being reimbursed. It
is estimated that the cost of claims
rework is as high as 20% of overall
revenue cycle operating costs.1
1.
Steven Huddleston, “Creating a Healthy, Unified
Revenue Cycle” HFMA Revenue Cycle Strategist,
November, 2012
An additional 6% of
gross revenue is lost to
underpayments.2
Nearly 13% of annual
provider revenue is at
risk to payer denials
nationwide.2
2 . “Keys to Effective Denial Management”
Emdeon Compass, March, 2010
ICD-10 Implementation
Fable of the Lion & the Gazelle
Lean Process Improvement
Henry Ford
Production Line Efficiency — Flow
The Revenue Cycle Production Line
Raw Materials
• Denials
• Zero Pays
• Short Pays
• Chart Review
Requests
Production Process
Finished Products
• Identifying
• Analyzing
• Qualifying
• Rebills
• Adjustments
• Appeals
Quality Control
• Measuring KPI’s
• Timing
• Sequencing
• Inspection
• Supervision
Lean Process Transformation
Kaizen
Change
Taiichi Ohno
Toyota Production System - TPS
1. Produce only what the market wants
2. Use visual aids to highlight where action is
needed
3. Use small batch sizes
Good
Continuous Improvement
Lean Process Problem Solving
Dr. W. Edwards Deming
PDCA
PDSA
Don’t let perfect get in the way of
better
One improvement often leads to another
Standardized Work
Source: lean.org
Standardized Denial Processing
Eliminating Waste – Muda
D
O
W
6
N
Defects
Effort caused by
omissions and
incorrect information.
Over-processing
More work or higher
quality than is
required.
Waiting
Wasted time waiting
for the next step in a
process
Non-Value Added
Processing
Processes that do not
add value.
T
I
M
E
Transportation
Unnecessary
movements of
documents and files.
Inventory
Excess denials, zero
pays & short pays
not processed.
Motion
Unnecessary
movement by people
(e.g. walking).
Employee
Underutilization
Underutilizing staff talents,
skills & knowledge
Defects
Over-processing
Waiting
Non-Value Added Processing
Motion
Employee Underutilization
Inventory
Root Cause Analysis
The Underlying Causes
No Authorization
Eligibility Issues
“The
Root”
Billing Issues
Information Required
the Patient
Coding Below thefrom
Surface
Information Required
Coordination of
Not Obvious
from the Provider
Benefits
The word root, in root cause analysis, refers
to the underlying causes not the one cause.
Cost Outliers
Duplicate Claims
Non-Covered Services
Untimely Filing
http://www.thinkreliability.com/Root-Cause-Analysis-CM-Basics.aspx
Root Cause Analysis
Fishbone Diagram
People
Inadequate staffing in
patient access
Process/Policy
Lack of coordination
with registration
Inadequate training
Poor role definition
Computer downtime
Equipment
Overcrowding
Environment
Denial Value Stream
Value Stream
Value Stream Mapping Process
Value Stream Mapping Kit
2 days
2 days
1 Min/Avg
.5 Hr
Valid? Yes
4 days
1 days
.5 Min/Avg
5 Min/Avg
2 days
No
2 Min/Avg
2 days
2 days
10 Min/Avg
1 Min/Avg
Reopen? Yes
No
5 days
5 Min/Avg
4 days
8 days
2 Weeks
10 Min/Avg
15 Min/Avg
2 Min/Avg
Await payer response
Send appeal
Write Appeal
Gather Information
Assign to appeal queue
Correct and rebill
Correct and Rebill queue
Write-off or rebill
Write-off or bill patient
queue
Review Denials
Assigned Denial Queue
Assign Denials
Review Denials
Denied Claims
Kanban
Kanban Board
• Visualize, optimize and manage workflow
• Enable real-time team collaboration
• Make Process Policies Explicit
Core Practices for Successful
Kanban Adoption Shallow
Visualize Workflow
Manage Flow
Make Process Policies Explicit
Improve through Collaboration
Kanban is based on 3 principles
Manage Work in Process
Start by Modeling Your Existing
Process
Denials
Appeals
Board
Board
Audit Board
Workload
Assignment
&
Management
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Home
Home2
home3
payers
aetna
provider
facility
carc
rarc
user
Tableview
Denial_Queue
Appeal – properly coded cerumen removal and modified E/M coding
Denial_queue2
appeal_queue
Questions