Just a few years ago, a denied claim was a relatively rare occurrence in the patient access world.
“It was an exception. It seems like it’s now become a rule,” says Cynthia Fry, PhD, senior vice president of revenue at Philadelphia-based Thomas Jefferson University & Jefferson Health.
Many denied claims give not just one reason for nonpayment, but several. Initially, the claim is denied for requests for medical records, which are sent. Then, the claim is denied again for lack of medical necessity. “We will get multiple denials that drag out and unfavorably impact our accounts receivable aging,” Fry laments.
Forced to invest significant resources trying to overturn all these denials, patient access departments are searching for the most efficient and effective way to do it. “All denials are worth appealing because we rendered the service and deserve to be paid,” Fry argues.
At Hennepin Healthcare in Minneapolis, “denials are more prevalent than ever before. Just look at the volume of vendors who have denial management solutions,” says Phillip E. Brooks, vice president of revenue cycle.
Revenue cycle departments “are in the business of submitting claims for services rendered in an effort to receive reimbursement,” Brooks says. “Insurance companies kind of play games. There are all kinds of shenanigans that go on.” Here are some effective tactics to overturn unfairly denied claims:
• Prove claims were denied because payors had not updated their systems to reflect the new coverages patients selected. At the time patient access staff verify insurance, everything looks good. When the health plan’s system is updated later, it turns out the patient was not eligible after all. Those claims are denied, a problem that has grown worse during the COVID-19 pandemic. “With COVID, the payors have experienced staffing issues just like everyone else has,” Brooks observes.
To overturn the denials, the department tracks the date claims were submitted and the payor’s response.
• Scrutinize the language in payor contracts. “Sometimes, the insurance company is not adhering to their own rules, and the payer denies,” Brooks notes.
Referring to the terms that were not met, such as specific timeframes to give a response on authorizations, can overturn some denials.
• Track denials caused by glitches with payors’ own systems. One payor’s system will not allow staff to electronically attach operative notes to surgery claims. “In not being able to do so, [the claim is] denied automatically,” Brooks says.
Staff must send the operative notes by fax or mail instead. “This is antiquated, and what does that do? It delays things,” Brooks adds.
Other payors operate with inadequate resources to manage the number of claims submissions they receive. “It seems like they have only one fax machine, and you are limited to the volume of documents you can send,” Brooks reports.
Overturning these denials really cannot be addressed by frontend staff. It requires involvement from revenue cycle experts. “Sometimes, the only way to get that resolved is to have a one-on-one meeting with the payor,” Brooks offers.
• Move balances from the primary or secondary payor to secure payment. “Coordination of benefits is always a big issue and very complex at times,” Brooks explains.
• Identify denials caused by alleged failure to meet the payor’s overly stringent time requirements. Some claims are denied because they are submitted just one day late; staff was holding off to make certain all the information was correct. “We bill it out, then the insurance says we had 45 days, and we are at day 46. That one drives me crazy,” Brooks says.
The department employs two denial analysts who spot those kinds of trends quickly. “We look at what can we fix, and what can we have the payor fix,” Brooks says.
• Expand the definition of what constitutes a denial. “We review all underpaid claims as well as unpaid ones,” Brooks says.
• Identify the specific clinical standards health plans use. “Our vendors who provide denial management solutions talk about how insurance companies are always walking a fine line between reimbursement and in practicing medicine,” Brooks says.
While total knee replacement always was reimbursed on an inpatient basis, some payors now reimburse for the procedure only on an outpatient basis. Likewise, certain payors deem some procedures experimental, but not others.
Some payors are even adding specifics about which brand of skin grafts they will pay for. One recent skin graft was denied because the payor excluded the specific brand used in the procedure. “We had been billing for it for years, and always got reimbursed,” Brooks recalls. “The patient received a huge bill, and understandably was miffed.”
Overturning denials has become a full-time job for many revenue cycle employees. Jefferson Health started a denial prevention and recovery initiative in 2020. “On the prevention side, we collaborate with patient access and care management,” Fry explains.
The recovery side is handled by the business office’s newly created 14-person denial team. “Some denials you can overturn easily. Others are much more difficult,” Fry notes.
About 20 employees at Hennepin Healthcare now handle denial management, with a pretty good track record. “But the amount of resources spent on overturning denials has to make sense. If you are spending $49 to get $50 of reimbursement, it’s not worth it,” Brooks cautions.
On the other hand, hospitals want to receive every dollar of revenue to which they are entitled. “In some places, if the denial is less than a certain dollar threshold, they don’t go after it. That is not the methodology we use,” Brooks reports.
The department takes the attitude that the health plan agreed contractually to pay for healthcare, and that the hospital deserves to be paid. It does not always work. The toughest denials are noncovered services. “That is a hard denial that they are just not going to pay no matter what you do,” Brooks laments. Considering the surge in volume of nonpayment of valid claims, more pushback probably is in order at this point.
“You have to meet with payors and hold them accountable. Alternatively, the insurers will hold us accountable,” Brooks says.