Our Denial Management Process and
Lessons Learned
Mike Jacobson
Providence Health & Services
October 17, 2013
Confirming our direction
Our Approach to a Denial
Management Team
Streamlining Workflow by
Standardizing Reason Codes
Electronic Statusing
Functionalities
Efficiencies Through Staff
Alignment
Communicating Information
Upstream
Providence Health & Services
System Mission Statement
As people of Providence,
we reveal God’s love for all,
especially the poor and the
vulnerable,
through our compassionate service
Vision
Together, we answer the call of
every person we serve: Know
me, care for me, ease my way.
Hospital Spotlight
Providence Health and Services
2012 At A Glance
Volume
Measurement
65,313
2,981
Employee’s (FTE)
Employed Physicians
691
Employed Advance Practice Clinicians
400
Physician Clinics
32
7,288
391,034
19
580,811
22
Acute Care Hospitals
Acute Care Beds (Licensed)
Providence Health Plan Members
Hospice and Home Health Programs
Home Health Visits
Assisted Living and Long Term Care Facilities
Confirming our direction
Our Approach to a Denial
Management Team
Streamlining Workflow by
Standardizing Reason Codes
Electronic Statusing
Functionalities
Efficiencies Through Staff
Alignment
Communicating Information
Upstream
Denial Management Goal
Design a standard, accurate process
to identify and collect all
reimbursement, while reporting loss
prevention opportunities to the correct
department.
Denial Management Growth Cycle
How We Built Denial Management:
1.
2.
3.
4.
5.
6.
7.
8.
Needed to define what a denial actually is
Audit, audit, audit – Review all our transactions. Prebilling edits, CCI edits, adjustments / write-offs, ERA CAS
codes, paper correspondence, partial reimbursements,
refund requests, etc.
Standardize reason and remark codes
Document current flows -- Appeal letters, hand-offs,
reporting, account documentation, follow-up steps,
policies, etc.
Redesign workflows and update P&P’s
Educate team(s) on appropriate adjustments and flows
Implement
Audit, audit, audit
What is a Denial?
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.
Streamlining Workflow by
Standardizing Reason Codes
Challenge: Standardizing denial reason codes from payers
1. Payers using different denial reasons; anywhere from 7 – 180
different denial codes being received
2. The teams would manually review the account to determine
denial reason
3. Team had to change hats – flipping between different denial
reasons
4. 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.
Streamlining Workflow by
Standardizing Reason Codes – cont.
Approach: widespread review of all responses from payers,
whether through electronic posting or manual cash posting
1. Created “denial crosswalk;” Taking all reason 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. By creating a normalized response, we now had less of an issue
trying to determine what was denied
Streamlining Workflow by
Standardizing Reason Codes – cont.
Streamlining Workflow by
Standardizing Reason Codes – cont.
Now that we have a standardized response, we can drive
denials in different directions:
1.
2.
Automated response to a denial – based on identified denials,
we script responses versus having a person work them.
(Example: no coverage, accident information, student status,
etc. Even some medical necessity denials.)
Specialist review/respond to denial – specific denials that need
interaction are driven to people who are responsible for those
denials.
Streamlining Workflow by
Standardizing Reason Codes – cont.
Denial
Database
Electronic
Posting's
Manual
Cash
Posting
Denial Crosswalk
Med Necessity
Denial – goes to
UM/QM/Dr.
No Auth Denial:
Goes to a
specialist to
audit/appeal
Insurance
corr.
Automated
Response:
Scripting letters to
patients/payers
Electronic Statusing Functionalities
Challenge:
Our market lacks standardization in claim statusing
Prior Process:
1. Claims “pended or delayed” at the insurance with untimely
or no communication to provider
2. 276 and 277 still remain 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
Electronic Statusing
Functionalities – cont.
You might ask “Why go looking for denials?”
1. The sooner it’s worked the sooner it’s paid
2. If resolved prior to formal denial, saving patients
hassle of the denial process and from getting statements
3. Avoids multiple people touching or intervening once
formal denial received from the payer
Electronic Statusing
Functionalities – cont.
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 (note) the claim status information back into our host
• When claims are in “paid status”, next follow-up date is reset to
avoid further “touches”
Electronic Statusing
Functionalities – cont.
What does this get us?
•Automated claim statusing – using the computer to work for us
•Reduce the need to do manual claim statusing; the team
avoids working on accounts that are “in process”
•By working accounts that need our intervention – we create
payments, resolve accounts and avoid denials
•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
Electronic Statusing
Functionalities – Results!!!
1. One PC can trace and document 5.1 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. Claim statusing is happening during and outside our
business office hours of operation.
3. Accounts needing follow-up are driven to the appropriate
person based on pend/denial reason.
4. Strengthening of our report capabilities – since account
notes are scripted with the claim status information, we can
query the denial reason for each payer.
5. Scripting tool has a 100% attendance record.
Efficiencies Through Alignment
of Staff
Challenge:
1.
2.
3.
4.
5.
All teams in the Business Office worked denials
Inconsistent processes, accuracy, training and education
Unintended write-off’s
Inability to accurately report losses and opportunities
Denials worked to varying degrees
Goal:
1. Use our tools to stratify denial work based on staff skill set and complexity
of work needed
2. Sustainable model, not impacted by staff turnover or vacancies
3. Eliminate hand-offs between teams; one point of accountability; from
working denial, to appeal, to writing off
4. Confidence that every possible dollar was being pursued adequately
Efficiencies Through Alignment
of Staff – cont.
Because of our 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. a specific payer:
Efficiencies Gained By:
1.
2.
Grouping Denials - All “like” denials are assigned to workqueue’s
Driven to specialists
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-to-date
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
Communicating Information
Upstream
•
To registration teams – identifying areas that new authorizations
are needed, processes need updating or RTE issues
•
To care departments – providing monthly detailed reports of
services performed and dollars denied
•
To contracting team – shows volumes of denials by payer and
payers ‘rolling up charges
•
To CFO’s –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)
What Are the DM Results???
Increase in Collections
• Collecting $3M a month
in overturned “no auth”
denials.
• Reduced 1 facility by
$4.4M in 10 weeks.
• Reduced incoming
Medical Necessity
denials by 11% over 6
months.
• Significantly reduced
LOS denials
Improved Payer
Communications
• Found 17
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.
• Provider a payer
scorecard related to
denials
Reduction in Days
Between Denial
Identification; Appeal;
Reimbursement
• Reduced days between
denial and eventual
reimbursement by 4.8
days in 2013
• Decreased need to
appeal by 28%
(resolved upfront
versus back-end)
New Features In Production
•Score denials based on scale of dollars impacted
and degree of difficulty. (slide)
•Payer scorecard – improve communication (slide)
•Self Service Reporting – care departments have
access to running and viewing their
department related denials
In Production – Cont.
Member not eligible
Low
$ Return
High
Length of Stay Denial
No Authorization Denial
Prudent Layperson Appeal
Easy
Complexity
Hard
In Production – Cont.
Questions?
Potential
•
Script PEOB to payers
•
Further identify how Remark codes are used with the goal
of scripting medical records or auto-completing requests
•
Partner with payers to develop improved Expand Line Item
Postings – with the goal of getting line item denials.
•
Develop internally Line Item Adjustments – so we can
attribute adjusted dollars to denied charges accurately