Appeal, appeal, appeal those denials

The odds are in your favor

Hospitals that appeal their denials by the recovery auditors (RAs) recoup their money 75% of the time, according to data provided by the American Hospital Association. But, only 40% of denials are appealed.

Hospitals are deciding not to appeal a large number of denials, a move that is short-sighted, says Brian Pisarsky, RN, MHA, ACM, director in Huron Healthcare’s Clinical Operations Solutions, with headquarters in Chicago. “A high rate of denials that are appealed are overturned. By not appealing, hospitals are leaving a lot of money on the table,” he says.

Hospitals shouldn’t accept the RA’s determination. Instead, analyze your denials individually and determine if the hospital is in the wrong. If you identify problem areas, look at ways to fix them internally. If you can justify the claim, take the time to appeal and keep appealing, he suggests.

According to the American Hospital Association, nearly two-thirds (61%)of hospitals filing an RA appeal during the second quarter of 2012 reported appealing short-stay medically unnecessary denials. On average, hospitals report appealing 118 claims through the second quarter of 2012.

It is time-consuming to appeal denials, which is why some hospitals are using third-party appeals organizations to handle their appeals even if the vendor was not involved in the initial determination of medical necessity, Pisarsky says.

Winthrop University Hospital in Mineola, NY, appeals almost every denial all the way to the administrative law judge level if necessary and is successful most of the time, says Maureen Gaffney, RPOAC, RN, senior vice president patient care services for the Long Island hospital.

“We have been very aggressive in how quickly we file an appeal at each level and average 60 days at all levels of appeal. It helps us stay on top of the RA appeals process and helps us recoup our reimbursement more quickly when we win the appeals,” she says.

“Appeals take a long time—up to 18 months—but now we’re beginning to see the fruits of our labors,” she says.

Case managers must be involved in the appeals process, says Amanda W. Berglund, MBA, MS, partner in Pace Healthcare Consulting, LLC with headquarters in Hilton Head, SC. “Medical records can’t just send the same information and expect the appeal to be successful. Case managers can provide additional information to show why the decisions were made,” she says.

Hospitals need to have a way of tracking all audit activities and deadlines, Berglund points out. “An organized approach is essential if hospitals are going to stay on top of the process and appeal in a timely manner,” she says.