Recent industry studies indicate that 8-13% of a hospital’s managed care claims result in full or partial medical denials it could be the income of two out of three medically denied claims In today’s financier environment, we need to be armed with the most authoritative weapon to look out for the rights of our doctors and get them reimbursed absolutely for the work they have done. Appeal Solutions gives us that shell Denial management for any process that practices expect can lead to cleaner claims and fewer denials from insurers. Experts say denial management can be part of an entire electronic medical record/billing system. With effective denial management solution, the majority of these denials can be prevented and revenue recovered. Healthcare managers need quick, real-time access to their outpatient book of business.

Medical Denial Book keeping and Review/Analysis
Denials are a consequence of actions within your control. For example, health plans often deny or return pre-authorization requests because of missing data. You can avoid this by ensuring that your pre-authorization requests include accurate patient information. Ask your doctor to check diagnosis and procedure (ICD9) codes for accuracy.

Good documentation can also help you avoid denials. While it may seem paranoid, write down the name of every person you talk to in reference to your health insurance problems and keep backups of all correspondence and paperwork. This documentation can be invaluable if an insurer denies your claim.

Additionally, it is important to know the health plan’s requirements. Many patients do not read the handbooks their health plans provide, so they’re unfamiliar with the plans’ requirements. Consequently, many appeals stem from ignorance. Make sure the treatment you are planning on receiving is covered under your insurance before treatment is received.

Denial Management Process
Most plans grant or deny treatment based on whether medical intervention is necessary for your well-being and whether the treatment you seek is appropriate for your health condition. Ask your doctor to contact the plan’s decision maker — usually the plan’s medical director.

Denial Management is an imperative part of the medical billing or revenue cycle management. It is a known fact that medical service providers make their revenue from two different sources:

a) Insurance Reimbursement

  • Primary insurance
  • Secondary insurance
  • Tertiary insurance

b) Patient payment

  • Self pay – No insurance coverage
  • Co-pay
  • Cost sharing (sometimes applicable when patient do not have secondary coverage)

A fixed $ amount is collected from the patient as co-pay during every visit to the medical service provider; co-pay amount differs as per what type of visit/ in-network or out-of-network healthcare provider and well determined by the insurance carrier. After the encounter, claim or invoice is generated by the billing staff which is sent to the primary insurance electronically or by paper.

Insurance carrier thoroughly checks the received claims for details once the details in claim found to be clean to their satisfaction, part of the allowed amount is paid irrespective of the claimed amount and balance is transferred either to the secondary insurance or patient as the case may be. If the details provided in the claim found to be dissatisfactory, the claim is underpaid or denied by the insurance carrier stating the reason for denial. Hence denial management is a part and parcel medical billing industry.

Imagine a hospital with $103 million in annual revenue and 40 percent managed care penetration that forfeits between $3.3 million and $4.1 million every year to denied claims and underpayments. Sound like a write-off that’s too big to be true? Such situations aren’t that unusual. Some experts believe as much as 90 percent of claim denials may be preventable through improved execution of verification, authorization, and clinical documentation efforts.

ATTA is the three steps for successful denial management.

  • Avoidance: Avoidance focuses on actions that can be taken upstream in the patient encounter to prevent denials from occurring in the first place. Denial avoidance is always present at all patient encounter such as: Pre-admit/Pre-registration, Scheduling, Admit/Registration and Billing. Avoidance is the first step in denial management it requires vigilance and balanced coordination between front end staffs and back end medical billing staffs. Few denials can avoided right away at the first patient encounter itself such as no-coverage, no authorization, max benefits exhausted, pre-existing conditions and plan benefits denials by verifying patient eligibility and benefits. When examining reasons for claims denials, about 70 percent were related to authorizations and 30 percent to eligibility, according to Ella-May Seth, analyst with the Health Care Advisory Board, referring to the group’s 2001 study, “Capturing Lost Revenues.”
  • Tracking and Trend Management: Besides keeping a track of the denial trend from insurance carriers this step also involves tracking the payment patterns from various insurance carriers and setting a system to alert when a variation from the normal trend is seen.
  • Analysis: The process of analyzing and aggregating similar denials is strategic in denial management. Analysis and segregation is a forerunner to follow-up process and hence it is an important step in denial management. Analyzing seems to simple word but requires great amount of experience and knowledge in medical billing and medical coding.

An Effective Denial Management Tool

In a typical healthcare system, about 17-23.5% of rejected claims are never resubmitted. A maze of policies, billing requirements control and regulations, as well as complex managed care contracts contribute to the number of denials that go with action. A Denial Management system can help you take control of your denials for more efficient and effective claims processing and accelerated reimbursements process.

Our Denial Management resolution can help you quickly uncover and correct the problems that lead to denials, so you can cut down your revenue cycle and increase your cash flow. Effective denial management allows you to develop crosswalks between individual payer codes and common denial reason codes for trend tracking. With these capabilities, you can reveal billing, registration and coding process weaknesses that could otherwise tie up millions of dollars in unpaid claims. You can also identify which payers or insurance companies have historically denied payment, as well as which departments in your facility are encountering a high volume of denials. With access to such critical information you can improve your claims processing to not only recover lost revenue, but increase the likelihood that your claims will be accepted on first submission.

BOSS targeted to solving health care providers’ growing problems with payer denials: the increasing incidence of insurers declining to cover submitted claims for any of a variety of clinical, technical and other reasons.

How BOSS handles denial management phase by phase.

  • Understanding the denials: Understanding the denial is a first step for resolution which leads to the other. As biller one should have clear idea why the claim is denied or paid low by the insurance carrier. Each insurance carrier has their own denial and corresponding codes. Understanding the denial gives the vision to the course of action, if not it just piles up the AR days.
  • Determining the factors for denials: Understating the factors that caused the denial is important which determines the course of action. Three are said to be the major contributors for denials.
    • Healthcare providers: Not providing the billing information on time such as encounter forms/ super-bills/ medical documents, not properly verifying patient eligibility and coverage, not obtaining authorization on time, out-of-network with insurance
    • Billing department: Coding error, charge entry error
    • Patient: Not providing correction insurance and billing priority details, providing incorrect demographic details
  • Clear contractual agreements: As a biller providing medical billing service for healthcare provider we must have an understanding on what contractual agreement is laid between the insurance carrier and our healthcare provider. Conducting a comprehensive contract review is important to identify and avoid provisions that might generate an unnecessarily high proportion of denials. Certain denials by the insurance carrier are legitimate and we cannot refute it’s because of contractual agreement for example claim denied for capitations, denied as provider not eligible to perform the service, provider is non contracted with insurance carrier. Claims also can be with held by insurance carrier due to credential issues examples failed to obtain or incorrect NPI, PTAN or PIN, need to send W9 form or other enrollment issues.
  • Coding structure: After creating the denial database, it’s important to establish codes for each type of denial. A formal coding structure will allow denial management and revenue recovery unit to track the denied claims.
  • Segregate denials into insurance carrier wise: Once we receive the denial we need to post them into the account with appropriate defined denial codes. After the posting is done, we have to segregate the denial as per insurance wise like denials from Medicare, Medicaid, BCBS and other commercials insurance. By segregating it by insurance wise easy the work and allows the biller able to understand the mannerism of each insurance denials and allows focusing on next action. Resolving one denial can be the quick answer other same denial sitting in the same insurance queue. By breaking down into small groups we can resolve many denials in quick turnaround time.
  • Segregate denials by factors: As already discussed above on factors that caused denials, we segregate them by their root causes which can further easy the work and follow-up and correction can be coordinated quicker. By such segregation thumb to ‘Act Upon’ the denials straight away such as requesting supporting documents from doctor’ office, calling up the patient for correct insurance billing priority details or demographic details. Reworking on coding and correcting charge entry errors for resubmissions. It saves lot of time.
  • Setting priority against the time: Once denials are segregated by insurance we have to set priority by insurance that have less filing limits and appeal limit. Mostly the commercial insurance are given high priority over the federal counter part due their less filing limit of 90days and work those denials first, making sure that corrected claims and appeals reaches the insurance before the time lapse. Then move on to BCBS and other federal insurance that have higher filing limit.
  • Acting upon denials: Identifying the appropriate action on denials determines the resolutions and cash flow. Certain denial requires simple correction and resubmission of claims. In other cases it may require additional supporting documents to substantiate the service provided such office notes, surgery notes or other specific medical documents. In many cases appeals are the last bout to fight out the denials with well supported documents such proof of timely filing and other specific medical documents. BOSS has well trained appeal process expertise with hand on experience in resolving many claims through appeals and grievance department.
  • Roll over: All denied claims must be resolved, pilling up of denials increase the AR days. Denial management is an intrigue part of revenue cycle management, were ascertaining responsibilities and decisions are made over the unpaid claims. Certain denials by the insurance carrier are legitimate and needs to be write-off. While other claims can be rolled over to patient responsibility such as no coverage at the time of service, max benefits exhausted, applied towards deductibles and co-insurances. We still have denials which require the decision of healthcare service provider such as Medicaid patient, HMO patients, certain Medicaid denials were we cannot rework for reimbursements, even timely filing denial were doctor’s office provided the billing information quite lately these are called managed care write-offs.

Every plan should have a clear appeals process that we must follow to the letter. Limited time from the date you had the procedure to get an appeal under way, possibly only 60 days. Depending on plan’s procedure, we may have to start with a phone complaint, then move to a written appeal.

There are two methods of appeal we do: internal and external. The internal appeal is to the insurer itself; an external appeal is to state department of insurance or other governing body.

Internal and external appeals
The internal appeal is the first step of our appeal process. Here, we request more information and ask the insurer to reconsider its decision. External appeals are filed when internal appeals have been exhausted and the insurer won’t reconsider your case. Many states have implemented laws governing external appeals that in certain cases give us the right to a review by an independent board of qualified experts. If the appeal is determined in our favor, our insurance company cannot deny your claim.

Successful Appeals Need Specific Expertise
Hospital’s business office personnel are already engaged and handling more than their share. They don’t have ample time and medical expertise needed to interpret medical records or establish medical necessity, and the addition of clinical resources may not be feasible. Your clinical personnel are busy with patient care and are time and again unable to devote time to support the business office in developing medical appeals. Unfortunately this results in failed appeals, unnecessary managed care write-offs and lost revenue. Recent studies says only half of all first denials are ever appealed. What’s more, studies show that 45 percent of all first denial appeals are won (50 percent of second denial appeals and 10 percent of third denial appeals are won).

A Challenge and Win-Win process
Our knowledge and achievement in the appeals process allows your business office and clinical staffs to focus on what they do best. We recognize that capturing the lost revenue to medical denials is only one part of the overall revenue recovery process; but the monetary gains can be noteworthy to your bottom line.