Mike Jacobson
Providence Health & Services | Oregon
October 21, 2010
1
Agenda – Reconfirming our direction
Our Approach to Creating a
Denial Management Team
Streamlining Workflow by
Standardizing Reason Codes
Developing Electronic
Statusing Functionalities
Creating Efficiencies
Through Staff Alignment
Communicating Information
Upstream
2
Hospital Spotlight
Alaska
Montana
Polson
Great Falls
Anchorage
Valdes
Seward
Kodiak
Missoula
Washington
California
Oakland
Mission Hill
North Hollywood
Burbank
Torrance
San Pedro
Everett
Seattle
Issaquah
Olympia
Centralia
Chehalis
Colville
Chewelah
Deer Park
Spokane
Yakima
Walla Walla
Oregon
Seaside
Portland Hood River
Newberg
Milwakie
Mt. Angel
Medford
3
Hospital Spotlight – cont.
System Mission Statement
As people of Providence,
we reveal God’s love for all,
especially the poor and the
vulnerable,
through our compassionate service
Oregon Region Vision
As people of Providence,
we will provide a connected
experience of care built on a
foundation of clinical excellence.
4
Hospital Spotlight – cont.
2009 Data
Seven Hospitals – GR
 Acute Admissions:
 Hospital OP Visits:
$3,2B
66,252
2,883,551
57 Employed MD Clinics – GR $297M
 Primary Care Visits: 1,127,160
Home Services – GR
 Home Health Visits:
 Hospice Days:
$185M
212,616
190,584
Total Gross Rev (with health plan):
$4.6B
Statistics
 Charity
 Bad Debt
 A/R Days
 Uninsured
 Community Benefit
$209M
5.44%
1.84%
43
7.75%
Portland
Seaside
Hood River
Newberg
Mt. Angel
Medford
5
Agenda – Reconfirming our direction
Our Approach to Creating a
Denial Management Team
Streamlining Workflow by
Standardizing Reason Codes
Developing Electronic
Statusing Functionalities
Creating Efficiencies
Through Staff Alignment
Communicating Information
Upstream
6
Denial Management Goal
Design a standard, accurate process to identify and
collect all reimbursement, while reporting potential
loss prevention opportunities to the correct
department.
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Adopting a Strategic Approach to
Denial Management
Approach: to review the current process and identify
opportunities:
1. Define what a “denial” is
2. Audit, audit, audit -- Pre-billing edits, CCI edits, adjustments /
write-offs, ERA CAS codes, paper correspondence, partial
reimbursements, refund requests, etc.
3. Document current flows -- Appeal letters, hand-offs,
reporting, account documentation, follow-up steps, policies,
etc.
4. Redesign workflows and update P&P’s
5. Educate team(s) on appropriate adjustments and flows
6. Implement
7. Audit, audit, audit
8
Our Denial Management Definition
Now: Anything that is “stopping”, “slowing” or “reducing”
payment. In or out of the business office control; we are responsible to
identify, work and communicate
Example: Pre-emptively resolving accident details; anticipating COB
issues before notification/denial; medical necessity; length of stay; etc.
Then: Originally, we were focusing on anything that had write off.
Example: no auth, timely filing, CCI edits, etc.
9
Streamlining Workflow by
Standardizing Reason Codes
Challenge: Standardizing denial reason codes from payers
Prior state (approximately 2 years ago)
1.
2.
3.
4.
Payers using different denial reasons; anywhere from 110 – 180 different denial codes being
received
The teams would manually review the account to determine denial reason
Team had to change hats – flipping between different denial reasons
Process was cumbersome and difficult
Goal: To standardize this information/responses from payers, and drive processes
based off that standardization. We want to direct the work to specialist on the
denial management team that will work common (same) denials.
10
Streamlining Workflow by
Standardizing Reason Codes – cont.
Approach: extensive review of all response codes from payers, whether through
electronic posting or manual cash posting
1.
Created a “denial crosswalk;” Taking all response codes from payers and
translate them into OUR denial code
example: one payer had 5 different experimental/investigational denial codes –
those are normalized into ONE internal code for us
2. Accounts are then directed to individual specialists on the team or to a
automated response
3. Then based on the denial, specific denial specialists follow the newly
implemented workflow
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Streamlining Workflow by
Standardizing Reason Codes – cont.
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Streamlining Workflow by
Standardizing Reason Codes – cont.
Now that we have a standardized response, we can drive
denials in different directions:
1. Automated response to denial – based on identified
denials, we script responses versus having a person work
them. (i.e. no coverage, accident information, student
status, etc. Even some of our medical necessity denials.)
2. Specialist review/respond to denial – Specific denials
that need interaction are driven to people who are
responsible for those denials.
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Streamlining Workflow by
Standardizing Reason Codes – cont.
Electronic
Posting’s
Manual
Cash
Posting’s
Insurance
Corr.
D
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i
a
l
C
r
o
s
s
w
a
l
k
O
u D
r a
t
D a
e b
n a
i s
a e
l
Med Necessity
Denial – goes to
UM/QM/Dr.
No Auth Denial:
Goes to a specialist
to audit/appeal.
Automated
Response:
Scripting letters to
patients/payers
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Developing Electronic Statusing
Functionalities
Challenge: Lack of standardization in denial processing and
notification from payers
Prior Process:
1.
Claims “pended or delayed” at the insurance with untimely or
no communication to provider
2.
276 and 277 inconsistent and inefficient
3.
Staff tracing claims on the payer webpage to identify the
payment status - 7 out of 10 were “claim in process”
Goal: Automated entire claims tracing process, so the right
staff person is touching only claims needing additional
work
15
Streamlining Workflow With
Automated Claims Status
You might ask “Why go looking for denials?”
 The sooner it’s worked the sooner it’s paid
If resolved prior to formal denial, saving patients
hassle of the denial process and from getting
statements
 Avoids multiple people touching or intervening once
formal denial received from the payer
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Streamlining Workflow With Automated
Claims Status - HOW?
1. Daily extract of unpaid claims for specific payers based on
predetermined criteria.
2. Using a scripting tool (Boston Workstation)
• Enter account information into the payer website exactly like a
person would
• Capture the claim status information from the payer website
• Uploads (document) the claim status information back into our
host
• When claims are “in paid status” resets follow-up date, to avoid
further “touches”
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Developing Electronic Statusing
Functionalities – cont.
What does this get us?
 Automated claim statusing – something that has been a struggle in
the Oregon market
 Reduce the teams need to do claim statusing; the team avoids
working on accounts that are “in process”
 By working accounts that need our intervention – we create
payments and resolve accounts
 Allows us to build a database of payer denials to track/trend
What do we need to keep an eye on?
 When the payer changes their webpage, our script might error out
 Need to monitor changes the payer makes to their pending/denial
codes – since that is driving our account follow-up
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Developing Electronic Statusing
Functionalities – Results!!!
1.
One PC can trace and document 4.5 accounts per minute – versus
manually at 1 account per minute.
--On average 25% required additional; 75% don’t need intervention, won’t be on
a work list and we won’t send statements
2.
3.
4.
5.
Claim statusing is happening outside our business office hours of
operation.
Accounts needing follow-up are driven to the appropriate person
based on pend/denial reason.
Strengthening of our report capabilities – since account notes are
scripted with the claim status information, we can query the
denial reason for each payer.
Scripting tool has a 100% attendance record.
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Creating Efficiencies Through
Alignment of Staff
Challenge: Constant training of new staff and inconsistent accuracy
Prior Process:
 All teams in the Business Office worked denials
1.
Inconsistent processes, accuracy, training and education
2.
Unintended write-offs
3.
Inability to accurately report losses and opportunities
4.
Denials worked to varying degrees
Goal:
 Use our tools to stratify denial work based on staff skill set and complexity of work




needed
Sustainable model, not impacted by staff turnover or vacancies
Eliminate hand-offs between teams; one point of accountability; from working
denial, to appeal, to writing off
Confidence that every possible dollar was being pursued adequately
Accurate, timely reporting to CFO’s
20
Creating Efficiencies Through
Alignment of Staff – cont.
Because of our new Denial Management structure, as well as Claim Statusing and
standardization of denial responses, we are aligning the team to specialize in
functions – specialists works denial types vs. specific payer:
Efficiencies Gained By:
Grouping Denials
1.

All “like” denials are gathered daily and built in worklists
Driven to specialties
2.




No Hand Off’s: A person specializes in a denial – they are experts in
the adjusting off the account; appealing denials; and are responsible
to audit denial adjustments each month
Sustainable: Each specialist is also responsible for keeping up-todate documentation on what payers need when appealing the denial
Creates Depth: Cross-training about every 60 days so everyone is
exposed to more knowledge and different types of appeals
Improves payer tracking/trending
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Communicating Information
Upstream
Improved feedback to teams:
 To Access Services – identifying areas that new
authorizations are needed or processes needing change
 To medical departments – showing what services are
being denied
 To contracting team – shows volumes of denials by payer
 To CFO’s – able to show how much currently denied,
how much in appeal process and then how much is likely
to written-off (based on appeal success by payer)
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What Are the Results???
Increase in Collections
• Collecting $16k a day in
overturned “no auth”
denials.
• Unknown amount avoided
through front-end process
improvement.
Improved Payer
Communications
• Found 3 discrepancies in
how national carriers were
using CAS reason codes.
• Those have been
distributed in the payers
national meetings to
change how codes are
used.
Reduction in Days Between
Denial Identification;
Appeal; Reimbursement
• In 3 month timeframe,
reduced days between
denial and eventual
reimbursement by 1.8
days.
• Increased denials
overturned by 25%
• Decreased need to appeal
by 22% (resolved upfront
versus back-end)
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What’s Next?
 Score denials based on scale of dollars impacted and
degree of difficulty. (slide)
 CFO scorecard – shows areas of greatest concern.
 Payer scorecard – improve communication (slide)
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High
What’s Next? – Cont.
Length of Stay Denial
Member not eligible
Low
$ Return
No Authorization Denial
Prudent Layperson Appeal
Easy
Complexity
Hard
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What’s Next? -- Cont.
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Questions?
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