Learn how to take the lead in your hospital’s denials management

Systematic approach should involve staff from all departments

When you tackle problems such as avoidable days and denials management, keep the lines of communication open with all departments in your hospital, back up your findings with data, and make sure you provide training to break the cycle, advises Jim Martin, revenue cycle management consultant with VHA Inc., an Irving, TX-based health care cooperative.

For instance, when you have an insurance or demographic issue that is recurring, meet with admissions staff and make sure they understand it, he tells his organization’s member hospitals.

If you have a lot of denied days or patients overstaying their authorized length of stay, make sure the rest of the staff are aware of what is going on and train them on how to avoid the problems, Martin explains.

"Denials management is a huge issue, and it’s often a challenge to figure out where to start. You’ve got to capture the denials information and measure it, then trend it and try to understand what the sources of your denials are," he says.

Be aware that everybody in your hospital plays a part in denials management. For instance, the admissions staff must make sure the patient demographics information and insurance information are accurate. Utilization management and case management must make sure the visit is authorized and the person has benefits for that visit.

The medical records people play a role since they supply medical records information to the payer. People in the business office collect the information as well and should be informed of any glitches in the system.

Effective management of a hospital’s revenue cycle takes a systematic approach to coordinate all the interrelated categories, Martin adds.

"As much as everybody wants to be successful on their own, when it comes to the revenue cycle improvements, you need cross-functional teams working together," he notes.

In some of the hospitals Martin has worked with, case managers lead the charge.

"Generally, the organizations that manage denials well really push the information to the people who can proactively deal with the issues before they occur; and in many cases, those are the case managers," he adds.

Improving the revenue cycle involves initiatives in many areas of the hospital, including improving processes for registration and benefits verification; improving clinical documentation; timely and accurate charge capture, coding, billing, and insurance follow-up; ensuring payment accuracy; and denials management, Martin says. "To be successful, an initiative to improve revenue recovery should be a collaborative effort between all departments in the hospital. The challenge is capturing the information you need and getting it to the right people so they can understand what is going on and help break the cycle."

Lines of communication

Keep the lines of communication open with all departments, back up your finding with data, and make sure your provide training to break the cycle, VHA advises its member hospitals.

For instance, when you have an insurance or demographic issue that is recurring, meet with the admission people and make sure they understand it, Martin advises. If you have a lot of denied days or patients overstaying their authorized length of stay, make sure the rest of the staff are aware what is going on and train them on how to avoid the problems, he says.

Case managers should work closely with physicians on the key areas of improving documentation, measuring outcomes, and cutting avoidable days, points out George Martin, MD, team leader for VHA. "Case management and documentation needs are best handled on a service-line basis. Nobody can be all things to all people; and within medicine, there are needs for specialists."

A teamwork approach to clinical standards helps hospitals gain buy-in from those who must meet them. VHA recommends that hospitals start with generic standards, such as those from InterQual or Milliman USA.

"We encourage them to bring all the clinicians together and create a real definition of what the expectations for care ought to be and what our expectations for outcomes are if the patient actually receives the care," George Martin says.

Once the external standards have been converted to internal standards, there still are challenges to eliminating avoidable days.

"You can’t do a lot about the fact that a nursing home bed is not available, but you do have control over whether a patient with congestive heart failure gets put on an ACE inhibitor," he adds.

Most of the time, physicians who don’t meet clinical standards of care don’t meet the hospital’s financial standards either, he points out. For instance, if they don’t get their patients started on antibiotics the first day, the patients are getting sicker, staying longer, and consuming more resources.

"The medical staff, in general, are uncomfortable with the leap from efficiency and effectiveness vs. cost of care and length of stay. They’d rather deal with clinical care, but it comes out the same in the end. The patients get the care they need on the level of care they should be on and get to the next level in a timely fashion," George Martin explains.

When the medical staff are comfortable with the clinical standards because they participated in setting them, that in turn makes them comfortable with measurements based on the standards, he says. "If you bring the clinical staff together, put the evidence on the table, and let them participate in clinical standards, it’s amazing what you can achieve." Don’t expect changes to happen overnight. Changing a hospital’s clinical standards can take as long as four to five years, George Martin points out.

Improving documentation

VHA advises a three-pronged approach to improving the documentation, Jim Martin advises:

  • Analyze current events. Look at discharge data and compare them to the norm, then examine a sampling of medical records to understand how things are being documented.
  • Compare your data to the norm. Include your discharge data and documentation data in the comparison.
  • Pinpoint opportunity. Look for cases where there are deviations in documentation compared to what might be normal distribution of patients.

Hospitals should put a lot of time and energy into educating the physicians on the benefits of accurate documentation, Jim Martin says.

Case managers should focus on the integrity of the documentation, working with the physicians, nurses, and coders to make sure there is complete accuracy and absolute clarity in documentation.

"The documentation drives the coding. It has to be right," Jim Martin adds.

He suggests that case managers work with physicians to make sure they understand how documentation affects the coding and the billing.

"There often is a mismatch between clinical terminology and terminology in the billing and coding side. By using certain terms, we drive coding that we didn’t intend to drive," points out George Martin.

For instance, if a patient is admitted with pneumonia and didn’t come from a nursing home, the physician is likely to write "community-acquired pneumonia" on the chart, meaning there is no underlying cause. In many cases, the patient will be coded at a simple pneumonia DRG, although he or she may have higher needs than a patient with a simple pneumonia.

In another example, a patient with a urinary tract infection and high fever with potential sepsis may be admitted to the intensive care unit on high doses of antibiotics. If the physician writes urinary tract infection on the chart, it translates into a bladder infection when coded, a condition for which hospitalization is not required.

"We need to educate doctors to write suspected sepsis on the chart so the patient will be coded on a higher DRG," George Martin says. Case managers should ensure that coding is accurate to ensure the hospital is not underpaid and so that quality measurements will be accurate, he adds.

For instance, there is some expectation of mortality in a patient with urinary sepsis but not with a simple bladder infection. "The physicians learn through clinical documentation initiatives ways that they can benefit in their own practice. For instance, they learn how it can equate to making sure their case-mix index reflects the actual patients they are seeing," Jim Martin says.

Physicians are very data-driven. He suggests that you show physicians examples of where there are opportunities to code more accurately and back it up with data analysis. Couple the data analysis with education on correct coding, Jim Martin adds.

An effective initiative is to create a clinical documentation reminder tool that can be slipped into a physician’s pocket. He advises customizing the tools to individual specialties or where the individual physician is seeing the most activity.

"These tools help make sure the physicians are completing documentation. They don’t tell them how to do it but ask if they think about certain things," Jim Martin says.

After you begin the initiatives, have an ongoing measurement and monitoring tool to continue to provide feedback. Start with a baseline analysis. Look at opportunities where better documentation may equate to more revenue. Check to make sure that your hospital isn’t overcharging or at risk for hitting audit flags.

"The starting point of any clinical documentation analysis is any area where there is an opportunity to document more accurately to increase revenue or avoid putting the hospital at risk for an audit," Jim Martin says. Measure, measure, measure. "As you measure, you may be able to drill into specific areas like a service line or a particular set of DRGs. Look at your high-volume procedures and your high-revenue procedures," he says.

At the end of the day, case managers should make sure that the documentation is complete and accurate and reflects the clinical encounter with the patient and the patient disposition.

"If the result is that it’s improving revenue, that’s great. If it’s bringing documentation in line so the hospital is compliant in the way it is billing, that’s a benefit, too," Jim Martin adds.