Patient access departments are seeing yet another new reason for denying claims: Payers are disputing the “level of service” for which they were billed. For instance, health plans often claim that patients failed to meet the criteria for inpatient care, meeting the criteria for observation status only instead.
“Insurance plans have developed their own restrictive procedure lists,” says Latayvia Law, a patient access associate administrator at Jackson Memorial Hospital in Miami.
Often, these criteria do not follow the CMS inpatient procedure list. These conflicts cause a lot of confusion, which can be costly for hospitals. Departments must maintain, train, and follow different protocols for different payers to avoid level of service denials. For patient access, says Law, “this causes an administrative burden.”
Approximately 1.3% of net patient revenue is lost at Jackson Memorial because of level of service denials, according to Law. “Some diagnoses are only getting authorized as observations.” Sometimes, patient access finds this out while the patient is still in the hospital. More often, the claim is denied after the fact. Most of these are reported as authorization denials. “But they are really level of care,” Law notes. “Payers often say missing documentation is the reason for the denial.”
To stop the denials, “patient access has to be vigilant,” says Lisset Bassas-Prado, director of eligibility and patient access at Jackson South Medical Center, also in Miami. Case managers can be of some help if they find out about the problem early enough. Collecting good data on the problem also is essential. “We need to predict and prevent denials using historical trends,” Bassas-Prado offers.
Patient access cannot do it on its own. It is necessary to turn to the hospital’s managed care department. This collaboration can give patient access some good data on how many level of care denials are occurring. They also can find out exactly how much revenue it is costing the hospital so the issue can be raised effectively with payers. “Addressing this through contract negotiations would yield sustainable results,” Bassas-Prado says.