Using Data to Reduce Denials
Presented to AAHAM MD
January 17 2014
Practical, Innovative, Medical Management Solutions
Changing Denials Landscape
 The nature of denials has changed
dramatically in the last 5 years
 Unsustainable Medical cost increases
 More denials From Government programs
 Fewer overturns
 Increasing cost to appeal
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Likely Impact of The ACA
 Increases in Medicaid eligibility to all
individuals with income below 138% of
FPL
 New enrollees likely to access more care,
which may initially result in more denials.
 However hospitals will now get paid for
portions of what used to be charity care.
 Overall earnings impact for hospitals
unpredictable.
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Impact of RAC on Denials
 The RAC programs saved CMS 488
Million Dollars net in 2011.
 With this success we have seen
expansion of additional programs by
CMS.
 Commercial carriers may take the same
retrospective approach.
 End result will likely be more denials
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Bottom line
 Increasing denials will impact net revenue
 Appealing denials no longer enough
 Hospitals must develop additional
strategies to reduce denials
 In the form of
• Root Cause denials Analysis
• Empowering physicians reduce denials
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Use data to reduce denials
 Provide credible, statistically sound data
 Identify root cause of denials
 Obtain physician leadership Buy in
 Engage physicians in groups
 Work with physicians to produce
solutions.
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Data Sources
 There are numerous different sources of
data in the hospital setting
 We recommend using denials data for the
following reasons
• It is timely and addresses the issue at hand
• Immediately available and easy to collect
• A steady flow of data enables frequent remeasurements
• It is credible and reliable
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Type of Data:
Both administrative and clinical Data
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Data Analysis
We focus our data collection with two main goals in
mind.
• Case Management Analysis
 Actionable data that allows us to better understand the denials
environment, efficiently allocate case management resources and
optimally adjust our case management strategy to allow the
greatest impact on denials reduction.
• Physician Drivers
 Understand the physician controlled drivers of denials at a level
that allows physician leaders to work closely with case
management to implement sustainable changes that help reduce
physician driven denials.
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Case Management analysis
 We look for trends & patterns that define
the characteristics of the denial
environment
 Average number of days per denied
admission. ADPDA
 How does ADPDA change over time?
 Denials by diagnosis.
 What part of admission frequently denied?
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ADPDA
The average number of denied days per
denied admission (ADPDA) is an important
number to track because it tells you several
things about your denial environment. This
number tells you how many days on average
are being denied for every account you
receive a denial on. If this number is higher
than 2 then you probably have some medical
management opportunity to reduce denials.
Below is an example of trended ADPDA.
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ADPDA
 ADPDA is important because it can be
impacted by Case Management
 ADPDA trend can also be measured to
evaluate progress of an intervention
 You can look at ADPDA of a facility
 You can also look at ADSPDA of a
specific diagnosis
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ADPDA Example
Quarter
13
Dollars
Jan to Mar
2011
$
716,580.01
Days
denie
d
515
Apr to Jun
2011
$
705,049.20
483
223
2.2
$ 1,459.73
Jul to Sep
2011
Oct to Dec
2011
$
811,179.84
527
253
2.1
$ 1,539.24
$
722,161.01
488
254
1.9
$ 1,479.84
Jan to Mar
2012
$ 1,239,381.31
782
264
3.0
$ 1,584.89
Apr to Jun
2012
$ 1,155,123.43
621
250
2.5
$ 1,860.10
Jul to Sep
2012
Oct to Dec
2012
$ 1,025,693.44
604
243
2.5
$ 1,698.17
$
389
211
1.8
$ 1,971.08
766,750.97
Admissio
ns denied
Avg. cost/day
denied
267
Avg.
Days/denial
Or ADPDA
1.9
$ 1,391.42
Total 2011
$ 2,954,970.06
2013
997
2.0
$ 1,467.94
Total 2012
$ 4,186,949.15
2396
968
2.5
$ 1,747.47
percent
change
42%
19%
-3%
23%
19%
ADPDA Example
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ADPDA Example
DIAGNOSIS
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ADPDA
SYNCOPE AND COLLAPSE
2.3
FRACTURE NOS-CLOSED
2.4
EPISODIC MOOD DISORD
2.9
DEPRESSIVE DISORDER
3.4
CHF NOS
4.6
FAILURE TO THRIVE-CHILD
4.3
ABSCESS NOS
3.7
MOOD DISORDER OTHER DIS
3.3
DIZZINESS AND GIDDINESS
3.0
ADPDA
 For diagnosis with ADPDA greater than 3
we would consider additional CM
Concurrent review and discharge planning
resources.
 In this example the following would be
candidates.
•
•
•
•
•
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CHF
Failure to thrive
Abscess
Depression and other mood disorders
Dizziness
Denials by diagnosis
Diagnosis with ADPDA less than 2 will
benefit from sentinel ED case management
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DIAGNOSIS
ADPDA
CHEST PAIN NOS
1.4878
HEADACHE
1.9048
ABDMNAL PAIN GENERALIZED
1.8333
PAIN IN LIMB
1.3889
FEVER
1.7500
Denials by service
1. Identify physician drivers of denials
2. Develop physician driven interventions
3. Track progress through remeasurements
4. Identify and institutionalize successful
interventions
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Why Focusing on service
1. More success working with groups of
physicians rather than individuals.
2. Individual physicians rarely drive
meaningful volume.
3. When they do they are usually too
important to mess with.
4. The competitive nature of physicians
also works best in groups.
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Example of service level data
Service
Cardiology
Infectious disease
Cardiac Surgery
Pediatrics
Neurology
General Surgery
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Admits
Total Days Denied
86
180
51
172
44
164
30
70
30
62
18
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Service analysis
1. Select services with high denials
2. Examine diagnostic trends and LOS
3. Select individual records for review
4. Perform root cause analysis to identify
denial drivers
5. Look for actionable solutions
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Example 1 Infectious disease
1. We found many cases of
pneumonia denied .
2. Most did not meet pneumonia
severity index criteria for
admission.
3. PSI is a clinical guideline
accepted by physicians.
4. Recommended in service using
PSI.
5. Follow up in 6 months to assess
progress.
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Example 2 Cardiac surgery
1. We found no particular diagnostic
patterns.
2. We did find that many cases were
denied in the middle of stay.
3. These were mostly ED admissions not
elective cases
4. We found many of the denials were for
delay in procedure.
5. Recommended closed CM interaction
with Physicians.
6. Follow up in 6 months to assess
progress.
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Example 3 pediatrics
1. We found many denials for
constipation.
2. We found many admissions for
severe constipation denied
3. No outpatient therapy had been
tried
4. Recommended pre-admit screen
to ensure OP therapy failed
5. Follow up in 6 months to assess
progress
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Summary
1. High ADPDA helps focus
concurrent review
2. Low ADPDA helps focus ED
sentinel CM
3. Service analysis help identify
specific areas of opportunity
4. Develop interventions
5. Re-measure
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Thank You
 We appreciate the Opportunity to
present to all of you at the AAHAM
Maryland Chapter today.
 We realize that with the many changes
in Heath care coming this year, Reducing
and overturning Medical Necessity
Denials is becoming an increasingly
important source of revenue recovery.
 If you have any questions please feel
free to contact us for any reason.
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Case Management Covenants, LLC
Case Management Covenants is a Maryland based
healthcare consulting services company specializing in
denial management, and appeal management Consulting.
Key Staff Contacts
 President: Olakunle Olaniyan, M.D., MBA –practicing
physician and former managed care VP and CMO
O.olaniyan@cmcovenants.com
 Director Of Client Relations: Brian C. Watt
B.watt@cmcovenants.com
 Chief Operations Officer: Dan Neall, MBA
D.neall@cmcovenants.com
Phone 410-715-4913
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