Automation is key to pinpoint denial trends
Automation is key to pinpoint denial trends
Savings can offset cost, expert says
"With layoffs now hitting hospitals and legislation and government bodies reducing payments, health care facilities cannot afford not to automate," says Katherine Murphy, CHAM, director of access services for Nebo Systems, a subsidiary of Passport Health Communications in Oakbrook Terrace, IL. Murphy also is a delegate to the National Associate of Healthcare Access Management and the president of the Illinois Access Association.
"The savings of denials clearly cover the price" of implementing denial management software, says Murphy.
In fact, Murphy says that the initial outlay for automated contract management, registration quality assurance, and ongoing subscription fees is probably much less than the cost of one denial or registration error that results in a reduction of payment or is a stale claim for which no payment is received.
"The multiple complexities that create troublesome denials are extremely difficult to track, monitor, and to understand root causes for non-payment," says Murphy. "We live in an automated world, and those who embrace the tools available play a better game. They have winning results. I don't buy into the fact that it is not affordable. You really cannot afford to go without it."
Customized automated workflows and work lists can zero in on problem areas before the claim goes to the payer and they have an opportunity to deny payment. "Believe me, the payers are highly automated," says Murphy. "Why give them an unfair advantage?"
Massachusetts General Hospital's financial services department has been using its current denial management system for six years. The previous system lacked the ability to track denials and was only able to give canned reports. With the new system, information on denials can be analyzed a variety of ways.
"You are able to extract the information and put it into Excel and do whatever you want with the data," says Jessica Rodin, financial access unit supervisor. "We extract all the denials that came in for the last month and sort it all different ways to identify trends."
For instance, it may be that staff are forgetting that some of the secondary payers to Medicare require an authorization. "When we have new people come in, they tend to be on the Medicare and Medicaid team, which have requirements that are a little more simple," says Rodin. "One pitfall for them is that they don't look at the Medicare supplemental. That is a common mistake."
At Sutter Health Sacramento Sierra Region in Sacramento, CA, denial management software was implemented in early 2008. This allows the department to communicate insurance denial trends to the patient access workgroups at the health system's various facilities.
"Our definition for denials are any issues that result in an account not being paid the correct payment the first time the claim is billed," says Michael Taylor, regional director for patient services. Denials are broken down in to two groups: "self-inflicted" or caused by the insurance company. "The self-inflicted denials are the errors we can control through process improvement," says Taylor.
In 2008, the self-inflicted error percentage improved from 15% to 10% of total registrations. "Our goal is to move from a 90% to 95% registration accuracy rate in 2009," says Taylor.
The software helps the department pinpoint trends in denials. For example, it revealed that the most common error made by registration is failure to collect the correct insurance carrier code. "This is critical for electronic claim submission and accurately matching payments to expected reimbursement," says Taylor. "Being a high managed care region, accuracy is critical."
The software identified errors resulting from an incomplete concurrent review, resulting in denied days, and underpayment by insurers due to outdated contract information in the payer's system.
The department has made these other changes to improve denial management:
In April 2009, the insurance verification, notification, and authorization validation process was centralized for nine acute care facilities. "Immediately, we identified variations in process," says Taylor. "By bringing this function into a centralized workgroup, we have standardized processes and reduced cost."
A new process for post-discharge validation of inpatient days was implemented. "Our case management process related to concurrent review communication has also been centralized," says Taylor.
A plan is in place to pilot online tools for insurance companies that recently developed web-enabled notification and authorization tracking software. Taylor says he expects to see a time savings with staff keying in the authorization data instead of calling the insurance utilization management department. Other benefits will include electronic documentation of authorizations and the ability to track inpatient authorized days.
Education liaisons were designated. These individuals conduct training sessions at the facilities for trended back-end identified errors, including denials. Recent sessions covered pre-admit and point-of-service copay collection and compliance training. "To augment our on-line classes and testing, they give classroom training, one on one, and web-based training - basically whatever style is most effective for the curriculum and learner needs," says Taylor.
[For more information, contact:
- Katherine Murphy, CHAM, Director of Access Services, Nebo Systems, 1 South 376 Summit Ave., Court B, Oakbrook Terrace, IL 60181-3985. Phone: (630) 916-8818. Phone: (630) 916-8818 ext. 34. E-mail: [email protected].
- Michael Taylor, Regional Director Patient Services, PAFS, Sutter Health Sacramento Sierra Region, P.O. Box 160100, Sacramento, CA 95816-0100. Phone: (916) 978-8901. E-mail: [email protected].]
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