Some patients clearly meet the medical criteria for a hospital admission. Despite this, the health plan refuses to pay the claim — because staff did not notify the health plan soon enough.

At Maury Regional Medical Center in Columbia, TN, several recent claims involving direct admissions were denied. All patients had come through the ED, were evaluated, and were moved to the observation unit. The patients were discharged, but returned to the hospital later on the same day and were admitted. The precertification staff had signed off on the observation stay.

“When the patients returned for direct admissions later that day, our precert team did not get the alert they normally would have to ensure authorization was reviewed at the time of service,” says Preservice Manager Jennifer Smith.

All the claims were denied because of failure to timely notify the health plan of the admission and obtain the required authorization. “When I was made aware of these denials, I identified an area we could improve on to ensure situations like this did not occur again,” says Smith, who explains the new process:

  • The admissions department alerts the inpatient precertification team of direct admissions. This ensures timely review of the patient’s chart so it can be financially cleared.
  • The precertification team reviews all ED discharge documentation. Depending on the patient’s status (either admitted or discharged home), staff take one of two actions to financially clear the account.

For patients who were admitted, staff contacts the insurance company to review requirements for authorization, medical necessity, and observation or inpatient status.

For patients who were discharged, the team notifies the health plan of the date of discharge, and whether the patient was discharged home or to another facility.

“With this slight adjustment to our process, we have not seen further denials related to direct admissions after discharge,” Smith reports.

Issues with timely notification also were happening for obstetric patients. In some cases, mother and baby were scheduled to be discharged, but the baby ended up in the neonatal ICU.

“The precertification team wasn’t notified of the change, so they failed to notify the insurance timely,” Smith says.

The health plan refused to pay the claims. To prevent this from happening again, the admissions team now immediately alerts the precertification team of the unexpected admission.

At Sharp HealthCare in San Diego, patient access staff put in some new processes to avoid “failure to notify” denials. Staff now work in close proximity to bedside placement nurses. “As they are clinically placing the patient, we are financially clearing the patient,” says Kristin Harold, manager of access services.

Patient access notifies the payor about the admission right when the patient is placed into a bed. Pop-ups on the registration system alert staff if the health plan has any specific requirements, such as using a certain fax number. “We work very closely with our payor relations and contract team to notify payors in real time, or as close to it as possible,” Harold explains.

In acute care, the situation can change rapidly. At 2 p.m., the patient could be in observation status. By 5 p.m., inpatient-level care is needed. “In an effort to mitigate that, we try to do a dual notification,” Harold notes.

That process was quicker and easier when several payors were accepting electronic notification. “They have since gone to a portal method instead, so we don’t have any integrated notification,” Harold laments.

All admission notifications are now handled manually. As soon as the patient is admitted, staff faxes the information or enters it in the payor’s portal. Most health plans require it to be handled within one business day. That means if the patient is admitted on Friday afternoon and Monday is a holiday, there was a backlog of several days’ worth of patients on Tuesday. “We did have some untimely notification of denials,” Harold says.

Previously, bed placement was managed independently at each of Sharp HealthCare’s six hospitals (five acute care and one behavioral health). Five years ago, a centralized patient placement unit was implemented.

“We are now simultaneously financially clearing and submitting for any precerts that are needed,” Harold says.

To avoid delays, staff conduct admission notifications 24 hours a day, seven days a week, as soon as the patient is in the bed. However, a new problem has emerged. After discharge, payors are disputing the level of care, claiming the patient did not need to be hospitalized. Some use length of stay to deny payment.

“We have one payor in particular that pushes back against any admission that’s less than two days, and says it is not inpatient,” Harold shares.

If a payor disagrees with the level of care assigned, a peer-to-peer discussion happens between the health plan physician and the patient’s physician.

“The other thing we have done is build some tools to trigger alerts,” Harold says. If an admission notification is somehow missed, staff fix it before the claim is sent. Likewise, staff are alerted if a fax number changes or a payor makes changes to the portal. “That’s the key, to make sure we get the information sent to the right people at the right time,” Harold says. With all these changes, the department has cut “untimely notification of admission” denials to near zero.

“We are at 0.002% of our total patient volume in the last year,” Harold reports.