Health plans are denying many otherwise-valid claims because of “level of care.” In other words, they are refusing to pay for hospital admissions, arguing such a move was unnecessary. “We frequently see ‘level of service’ denials,” says Brittney Brinker, senior consultant at nThrive.

To prevent these denials, revenue cycle departments should work with utilization managers to fully understand why level of service denials are happening. Ensure clinical documentation is detailed enough to support inpatient level of care, and be sure to submit such evidence to the health plan while patients still are in house. “The percentage of denials that are overturned decreases the moment patients are discharged,” Brinker reports.

Ideally, physicians also engage in peer-to-peer discussions with the health plan’s physician while treatment is underway, instead of after discharge.

During payer contract negotiations, make an issue of clearly defined response time frames. Payors require clinical documentation supporting inpatient level of care in certain periods, usually within 24 hours of the inpatient order. However, health plans rarely are held to those same time frames to authorize the inpatient admissions. “Once the patient is discharged, this opportunity is lost,” Brinker adds.

At St. Luke’s Health System in Boise, ID, keeping on top of the inpatient decision process is an ongoing challenge for the patient access team. “It is a large, and growing, work effort to avoid denials of patient admission status,” says Michael Bennett, MBA, MHA, senior director of the revenue cycle.

That means admission notification to payers, ongoing medical necessity reviews with payers, audits on documentation, and physician peer-to-peers. “We have been in the process of expanding our utilization management team in response to these trends,” Bennett reports.

Health plans are arguing patients should have been managed by observation, and pushing back on inpatient claims. “Plans are becoming more stringent and denying more claims related to inpatient level of care,” says Neville Zar, managing director at Deloitte.

Clinical documentation often is the deciding factor in these level of care denials. “What is required from the physician is the admission order,” says Zar, stressing that it all starts at the point of scheduling. “Patient access initiates the chain of events.”

That means making sure none of the clinicals are missing: the H&P, progress notes, operative reports, and test results. The health plan might agree the patient met inpatient criteria. Sometimes, peer-to-peers are the next step. “It is of the utmost importance that the patient’s clinical documentation depicts the patient’s clinical condition, which ultimately determines the level of care,” Zar underscores.

Disputes on which level of care is appropriate complicate matters further. A case manager might think a patient should go home, but the admitting doctor says hospitalization is needed, or vice versa. “There needs to be an ongoing dialogue to determine the accurate level of care,” Zar says.