The best way to improve your hospital’s denial rate is to prevent denials in the first place, says Toni Cesta, RN, PhD, FAAN, partner and consultant in North Bellmore, NY-based Case Management Concepts.
To do so, case managers must know the requirements of each individual payer. But at some hospitals, the finance and/or managed care departments don’t provide case management with the utilization review section of the contract where the rules are outlined, she adds.
“This creates a lot of problems and increases the potential denials. We have to comply with the rules and that’s hard to do if we don’t know what they are. A lot of contracts require hospitals to send in a review at a certain time. If it’s late, the case gets an administrative denial,” she adds.
All case management directors should make sure they have a current copy of the utilization review rules so they can make sure their staff complies, Cesta adds. “We don’t need the whole contract, but we do need what the hospital has agreed to do in the utilization review section, as case management is responsible for most of that,” she says.
Some of the bigger hospitals have the same utilization review section in all contracts. “This clearly helps the case managers make sure they are following payer requirements,” Cesta says.
Case management leadership must be actively involved in managed care contracting, adds Beverly Cunningham, RN, MS, ACM, consultant and partner at Oklahoma-based Case Management Concepts. “Now, more than ever, case managers need to know what is in the utilization management portion of the contract. We need to understand it, how it works, and how and when we can appeal,” she says.
At the very least, every contract should be reviewed by the director of case management prior to being signed, says Brian Pisarsky, RN, MHA, ACM, director at KPMG Healthcare Solutions.
Look for what criteria each payer uses, the requirements for notification on weekends and evenings, and how the hospital is notified if the insurer makes changes in the contract during the year. “Spell out what the case management department is required to do to be compliant. It’s much better to have all the details spelled out in the contract instead of leaving them vague,” Pisarsky says.
Analyze the denials process and create a report that your contracting staff can use to talk to any payers that routinely issue inappropriate denials, says Tina Davis, RN, MS, CMAC, senior consultant for the Center for Case Management.
“When the hospital’s contracting person sits down at the table with the payer representatives, they can talk through the issue and make changes in the process to reduce inappropriate denials,” she says.
Pisarsky reports working at organizations where every contract’s language is reviewed by the case management director, who could add specifically what was expected as far as authorization and medical necessity were concerned. “It was spelled out so there would be no question about the rules if they were changed in the middle of the contract,” he says.
The contract should include who case management should contact and how concurrent appeals should be issued, Pisarsky says.
In addition to Medicare and Medicaid, hospitals treat patients who are insured by a number of commercial payers — many of which offer multiple insurance plans, all with different nuances, says Yomi Ajao, vice president, consulting for Cope Health Solutions.
Case managers must be familiar with the rules set out by each commercial payer, traditional Medicare, Medicare Advantage plans, Medicare HMOs, Medicaid, and Medicaid HMOs, all of which may have different requirements, he says.
Davis suggests creating a spreadsheet of all payers that shows whether they pay by diagnosis-related group or on a per diem basis, when they want reviews, the clinical criteria set they use, and other information the case manager can use to make sure the insurers have the information they need.
Keep track of each payer’s “trim date,” the day the payer expects the patient to be discharged.
“The requirements of the payers and the trim date should drive the work by the case manager,” she says. For instance, if the payer wants a clinical review on day four and the case manager doesn’t have additional information, the payer is likely to start denying days. “This should get the case manager talking to the clinical team for additional information or planning a discharge if it is appropriate,” she adds.
In some hospitals, the requirements for authorization are in the hospital’s computer system. At others, the case management department has prepared a handout for all case managers that spells out the requirements and contact numbers for all payers, Pisarsky says.
The most efficient way to ensure that case managers are following the payers’ requirements is creating an IT platform that includes InterQual and Milliman Care Guidelines criteria as well as the various payer requirements and is available to everyone in the hospital, Ajao says.
“With that kind of system, the hospital can configure all of the benefits and requirements to make the process easier for the entire team,” he says.