Best Practices for Managing Denials
When denials occur, case managers should create a plan to investigate and manage each one to determine why the claim was denied and how they can help. Using this approach, some managers have uncovered trends and root causes that can prevent future denials.
But is it worth the effort? Beverly Cunningham, RN, MS, ACM, partner and consultant at Case Management Concepts, LLC, says it is critical for case managers to hone this skill for the benefit of the patient and the hospital.
“The goal of the case manager role is to coordinate utilization management, resource management, discharge planning, and care coordination,” Cunningham explains. “A denial indicates that the hospital will not be paid for the care provided to the patient. At times, a denial can be reversed, but it does require back-office work that can be costly to the hospital. With some payers, a denial to the hospital may mean the patient has additional financial responsibility for the care provided to them.”
The denial management process is best approached proactively, “that of a good offense — ensuring the appropriate documentation in the record and timely interventions that decrease any possibility of a denial,” Cunningham says. Other best practices include:
- Following the Two-Midnight Rule regulations for traditional Medicare patients;
- Understanding the payer’s contract, which may include content from a commercial payer agreed upon by the hospital or the regulations from either a federal or state payer;
- Ensuring the correct payer is assigned to the patient. This should include accurate information from the patient that also is verified by the patient access department, whose detailed work is critical;
- Ensuring an effective physician advisor process. If documentation in the record does not support the level of care ordered, the case manager and the physician must discuss the issue. If additional documentation is unavailable, or still does not support the level of care ordered, a timely referral to the physician advisor must occur;
- Maintaining a case management presence at every entry point of the hospital. This supports the first suggestion of a good offense with appropriate documentation. Whether the entry point is the ED, cath lab or imaging, transfer into the hospital, a clinic or physician’s office, or a scheduled admission, a case manager should review the orders and refer to the physician advisor for review.
With a proactive denial management plan in place, case managers can turn their attention to a specific set of steps to begin the process. Cunningham details one way for RN case managers to handle the process, noting that staffing should be appropriated to support this role:
- Review the order for level of care, whether it is an admission or continued stay.
- Assess the medical record for documentation and supporting test results.
- See the patient. Effective denial management includes an “eyes on” view that cannot be replaced from behind a computer.
- Communicate with the attending physician if the documentation does not support the level of care ordered. A conversation with the physician providing care always should take place before a referral to the physician advisor.
- Understand the contract with the payer, including whether a peer-to-peer may occur during the hospital stay. If required, a physician advisor can speak with the payer’s medical director on behalf of the attending physician.
- Document the steps above in the hospital’s utilization management system. Utilization management documentation should not be placed in the medical record.
- Provide information to the payer as indicated in the contract. Keep documentation current.
- Close any case with the approved days from the payer. Follow up on any account with which the payer has not responded with approved or denied days.
“It definitely takes more time to review and appeal a denial than it does to follow the steps above,” Cunningham notes.
After case managers have carried out this process several times, they might start to notice trends that will help them improve denial management. It also goes the other way, Cunningham shares, as trends “help the case manager to understand when he or she may not be following the steps.”
Trends also can appear during a physician’s exam, during a diagnostic test, or through a payer’s analysis. When these are uncovered, the case manager should report it to their leadership, who can then connect with the appropriate groups, including physicians and payers, to resolve it moving forward. Trends also should be reported to the hospital’s utilization management committee. Denial management as a whole sometimes can amount to a great deal of work for one case manager, so support should be brought in as needed.
“Best practice includes a denials and appeals case manager who can support the individual case manager and leadership when trends occur,” Cunningham says. “This case manager can provide feedback and reports that will assist the entire department, physician advisors, and any physician groups who may have been involved in the denial. Even if providers are not involved in denials, they should have the feedback so they can ensure their practice supports any denial management initiative.”
Denial management helps the entire hospital run as efficiently as possible considering its great effect on revenue and patient satisfaction. For that reason, Cunningham says, “case management department leaders should ensure that denial management is included in their RN case manager orientation.”When denials occur, case managers should create a plan to investigate and manage each one to determine why the claim was denied and how they can help. Using this approach, some managers have uncovered trends and root causes that can prevent future denials. It is critical for case managers to hone this skill for the benefit of the patient and the hospital.
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