Real-time management keeps denials rate low

Hospital denials consistently are below 1%

By conducing real-time concurrent denials management, Jewish Hospital and St. Mary's Healthcare, a not-for-profit health care system in Louisville, KY, keeps its average denials rate below 1%, consistently exceeding the hospital's goal of a denials rate of under 2% for commercial patient days, including Medicare managed care patients.

"Our goal is to never let denials happen, but when they do occur retrospectively, we appeal. We try to get the issues resolved before they get to full denials, but if we think a case is appealable in any way, shape, or form, we appeal," says Bev Beckman, RN, ACM, CPHQ CHAM, corporate director of care management at the health system, which includes a 442-bed tertiary care regional referral center and a 192-bed community acute care hospital.

Managing denials is a collaborative effort of the hospital system's unit-based case managers and a team of LPN payer specialists, located at the health system's resource center, who provide remote denials management and utilization review services for the two acute care hospitals.

As the patient enters the acute care part of the hospital, the care manager on the unit reviews the patient chart to ensure that all pertinent clinical information has been entered into the hospital's custom-built case management system, developed by a local consultant.

"The system has been upgraded over the years based on compliance and payer guidelines. It's our tool for communicating among the disciplines on our very large campus," she says.

The LPN payer specialists take the information from the case management system and communicate it to the third-party payer by telephone, fax, or e-mail, whichever is the preference of the payer. The hospital system has a relationship with two payers that allows them limited access to the hospital system and to obtain their own clinical information.

When the payer specialist receives a proposed denial from the payer, he or she sends an electronic message to the case manager. The two clinicians work together to collect all the clinical information necessary to get the denial overturned concurrently when the patient is still in the hospital.

Relationships between the payer specialists and the payers are very important, Beckman says.

"The payers are looking for good clinical information. Our team is well-trained and knows what they need to give the payers upfront. If they don't have the information they need, they call the care manager and assure that all the appropriate documentation is in place before they call the payer," she says.

The LPN payer specialists go through a customized training program that includes instruction on how to use the health system's electronic medical record, how to do an admissions review, how to conduct a continued stay review, how to use the Milliman criteria set, and specialized training based on the specific requirements of payers they're assigned to cover. They also have training with a mentor who helps them develop their own internal processes.

The payer specialists are assigned to specific payers. Each day, their work queue includes information on what cases they need to work. The case managers have the same information so if a review is needed, the care manager knows it.

Beckman and her team monitor productivity and workload balance on a daily basis to make sure nobody is overloaded.

"We look at the number of new admissions, continued stay reviews, and discharges, along with pending cases each day to make sure nobody has more work than they can handle. If one payer specialist is backed up, we assign another one to handle some of his or her caseload," she says.

The hospital contracts with an outside physician advisor organization to conduct second-level medical necessity reviews and for assistance in denials management.

"We use the physician review organization for denials when we feel that the stay was appropriate and we need a physician-to-physician discussion to get it overturned," Beckman says.

If the denial is issued retrospectively, the hospital's data analysis specialists in denials management review the record and determine if the hospital should appeal.

"If they feel they need more physician support, they send it on to the physician, who writes the appeal," she says.

In addition to a robust denials management program, the hospital system has processes in place to avoid denials in the first place, Beckman says.

"As patients enter the system, we work with the physician to determine appropriate status. We try to get everything correct from the moment of admission," she says.

The hospital has care managers who cover the emergency department from 9 a.m. to 7 a.m. seven days a week.

When a patient comes in through the emergency department, the care manager works with the admitting physician to determine appropriate patient status at the point of entry.

"We have multiple other points of entry. Patients come in for outpatient procedures, through the cardiac catheterization laboratory, and from surgical services. We have procedures in place to ensure that the status is correct upfront," she says.

"Every invasive cardiac procedure goes to the outside physician firm for a second-level review," she says.

The unit-based case managers review every patient for medical necessity after they are on the unit.

The hospital uses both InterQual and Milliman to ensure that patients meet medical necessity and continued stay requirements.

"InterQual has been used historically for Medicare patients. At this point, 90% of our commercial payers use Milliman," she says.

InterQual is a useful tool when the care managers work with the physician to discuss appropriate status, she says.

"Milliman provides more information about actual patient management," she says.

The care managers use the Milliman criteria to set individual goals for the day on their daily unit-based rounds with the nurse manager and nursing staff.

The team makes walking rounds on the unit and involves patients and family members in developing the plan of care and goal setting.

"We use Milliman as a tool for our team to determine what care the patient needs and if they have had all the recommended tests and procedures. It's all about ensuring that medical necessity information is on the chart on the unit and communicated to the remote workers so they can keep medical necessity justified," she says.

Beckman is a member of the management compliance team that worked for several years developing internal policies and procedures for the Recovery Audit Contractor (RAC) program.

The team implemented a data-based tracking system, set up a dedicated post office box for RAC correspondence, and designated a RAC coordinator who handles all communication with the RACs.

When a RAC request comes in, the RAC coordinator logs it into the system and sends it electronically to the appropriate department.

The hospital has contracted with the physician advisor company to handle RAC appeals.

[For more information, contact: Bev Beckman, RN, ACM, CPHQ CHAM, corporate director of care management, Jewish Hospital and St. Mary's Healthcare, e-mail:]