Denial rates impact reimbursement
If you think your hospital doesn’t have a problem with denials, then you aren’t doing anything to track them, says Christine Collins, CHAM, director of patient access for Brigham & Women’s Hospital in Boston. The heart of successful denial management, she emphasizes, is a denial database that categorizes the bills that are denied and the reasons why.
With the challenges of clinical vs. administrative denials, observation vs. inpatient status denials, and complicated time-sensitive authorization processes, she adds, the cash flow can be difficult to follow.
To get a handle on what wasn’t getting paid and why, the hospital formed an inpatient denial team — co-chaired by Collins and a physician — to oversee the process, with representation from patient access, billing, medical records, and care coordination. Boston-based Partners Healthcare system, of which Brigham & Women’s Hospital is a member, awarded the team a 2001 Partners in Excellence Award for outstanding efforts in improving management of denials. Collins says the team continues to be recognized for its achievements.
Building a denial database was the first order of business, she says. An analyst in the patient access department provides upkeep of the database, while other functions are handled by the following areas:
- Care coordination provides analysis of clinical/utilization review denials.
- Patient access assesses authorization processes.
- Patient accounts pursues final outcome.
- Medical records handles documentation needs.
- Medical director handles clinical appeals.
The process begins, she explains, when accounts receivable gets a denial and puts it into the data-base, assigning it to a person based on the kind of denial it is. "What we do that’s wonderful is assign denials so we can track them. If [a denial] comes to my office, but is clinical, I reassign it to a person who can handle it," Collins notes. "If it’s a pre-cert or pre-authorization [issue], it’s assigned to my staff." "Most hospitals," she adds, "don’t have the IT [information technology] to have this information at their fingertips — [information about] who’s working what."
Pat O’Keefe, denial manager in patient access services, is in charge of handling all technical and administrative denials, Collins says, and at times works very closely with care coordination personnel. "In every area, care coordination has one or two people who own this [denial management] process."
O’Keefe says she consults with utilization review nurses to determine whether a patient has inpatient or observation status, which often is a point of contention with insurance companies responding to claims. On a day-to-day basis, O’Keefe notes, she is responsible for researching any [technical and administrative] denials that are related to inpatient admission. "[That includes] writing the appeal and getting any kind of documentation I need to support our case, [including] screen prints of notes saying who we spoke to [at the insurance company], what authorization number we got, and also getting any necessary medical documentation, and sending it off to the insurance company," she says.
Even in the case of technical or administrative denials, O’Keefe says, many insurance companies require that a patient’s medical record accompany the appeal. "I have a spreadsheet that I’ve developed," she adds, "and every time I send out an appeal, I enter it on the spreadsheet so I can keep a running total, including what the status is, if an appeal is still out."
Collins is reluctant to make before-and-after comparisons regarding dollars recouped by the denial management initiative. A reimbursement denial that’s now quickly reversed via the new denial management process eventually might have been handled successfully through appeals, she points out.
"[In the past], if we had these denials and weren’t tracking them but did a lot of legwork and eventually got paid anyway, it might have taken six months instead of six weeks," Collins says. "In the old days, and still at many hospitals, people in accounts receivable are constantly resubmitting bills."
The beauty of the tracking process, she adds, has been in the ability to notice trends, improve processes, and work with payers on better system-to-system communication. "Data are so powerful," Collins notes. "Until you have that, you’re looking at [denials] one by one. Once we track them, we have the documentation to support why we shouldn’t have been denied. Settlements with payers can be made based on data. We maintain all the documentation on-line, and we follow up denied claims until resolution."
Within the database, there is the capacity for electronic communication to prompt steps in the appeal process, she says. "If we notice that something is a trend and should not be a denial, we can include that in the next contract negotiation," Collins says.
Examining individual problems can lead to long-term solutions in other areas. Some redundancies in the preauthorization process can be beneficial to the payer as well as the hospital, she points out. "They want to make their administrative burden smaller, too."
While in the past, a payer might contend that the hospital never had made a preauthorization call on a particular case, the capacity for electronic communication puts the accountability on both sides, Collins points out. "When we start to do an autopsy on denials, we say, Gee, their system has its own problems.’ Sometimes, what we have here is different from what they think. If you don’t dot an I on one system, the other system kicks [the bill] out," she says.
"When we first started doing appeals, [the payers] had not had a lot of hospitals doing them," O’Keefe adds. "It would take five months or longer for them to acknowledge that we’d sent an appeal. Then they would send a letter saying we would be notified in 45 days."
Tracking denials prevents certain groups of patients from slipping through the cracks in the admitting/screening process, she notes.
What Brigham & Women’s system provides, Collins points out, "is more understanding so we can improve our process. Until you have a common, integrated database that is completely open, honest, and hospitalwide, you’re not going to have that. It’s the little things. It’s truly understanding the business, and what the issues are, and [asking] how can we fix them."
Need more information?
Christine Collins, CHAM, Director of Patient Access, Brigham & Women’s Hospital, Boston. Telephone: (617) 732-7453. E-mail: firstname.lastname@example.org.
Pat O’Keefe, Denial Manager, Inpatient Access Services, Brigham & Women’s Hospital. E-mail: email@example.com.