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5 Actions to Take for Proactive Denial Management

Publish Date
Read Time
September 24, 2020

All roads will lead to denials in 2021—unless you have a clinically-integrated revenue cycle

During any disaster, organizations go into survival mode. It’s about saving lives and keeping people safe. That’s exactly what we saw with COVID-19. In the first few months of the pandemic, providers were inundated with symptomatic patients while struggling to obtain personal protective equipment. CDI specialists were pulled away from documentation and into direct clinical care roles. Coders were furloughed, laid off, or their responsibilities shifted completely. Everyone working in a healthcare organization felt the effects of the virus.

Over the last six months, organizations have also dealt with insurmountable regulatory change: Countless new COVID-19-related CPT and ICD-10 codes with varying effective dates; evolving guidance around beneficiary cost sharing, place of service codes, and telehealth modifiers; insurance waivers with varying effective dates; new query forms; new COVID-related coding guidelines, and more

Most recently, Medicare now requires a positive COVID-19 lab test documented in the patient’s medical record as a pre-requisite for a 20% increase in the MS-DRG weighting factor. In addition, payers that initially paused audits during the onset of the pandemic are starting to resume them. The Office of Inspector General also recently announced it would begin auditing Medicare payments for inpatient discharges for beneficiaries diagnosed with COVID-19.

With that said, organizations can’t continue to look in the rear-view mirror. They need to start looking ahead and anticipate what’s coming next. COVID-19 poses many new compliance challenges, and it exposes already-existing ones. That’s why it’s critical to act now by devoting ample resources to denial prevention. More specifically, it’s important to ensure a clinically integrated approach in which coders and CDI specialists work in tandem.

Here are five actions toward proactive denial management every HIM director and/or CFO should take now to set their organization up for success in 2021:

  1. Make denial management everyone’s responsibility. When it comes to denials, it’s easy to point the finger at coders. However, denials occur for a whole host of reasons, many of which have nothing to do with coding. This messaging needs to come from the top down. Everyone plays a role in submitting clean and accurate claims. Make sure everyone understands their responsibility and takes it seriously. Also make sure everyone understands the implications of denials on revenue, staffing, service lines, and more—that their actions (or lack thereof) could directly impact patient care and the organization’s solvency.
  2. Capture all underlying conditions. This goes for coders and CDI specialists. CDI specialists need to make sure that documentation clinically supports each diagnosis, and coders need to make sure they go beyond capturing a single CC or MCC that shifts an MS-DRG. Without additional CCs and MCCs, insurance companies may question the necessity of a COVID-19 admission and/or the length of stay. Underlying conditions also affect risk adjustment, quality indicators, and more.
  3. Dig into the denials data, then share it. What types of denials does your organization see most frequently? What is your history of denials by payer? What about your volume and type of query to each provider? What about COVID-related queries specifically? What was your volume over the last two or three months? Response rate? Impact on the case-mix index? The more you can drill down into this data, the better.
    Also remember that coders aren’t the only ones who need to see this data. CDI specialists, physician advisors, and front-desk staff need to see it as well. CDI specialists can help appeal denials due to lack of clinical validation. Physician advisors can identify educational opportunities for physicians. Front-desk staff can ensure accurate capture of demographic and insurance data. It truly does take a village to address denials.
  4. Prioritize COVID-19 admissions. Any time there is an opportunity for bonus payments, there’s an opportunity for retrospective audits. Consider the following questions to avoid payer scrutiny:
  5. How will the organization ensure timely documentation of a positive COVID-19 lab test in the record, when applicable? How can the lab facilitate this? Can front-desk staff obtain a copy of lab results from external labs? The positive lab test—in addition to detailed clinical documentation—is what will help organizations prove that the admission was due to COVID-19 and not pneumonia, COPD, CHF, or a variety of other complications.
  6. Can coders validate the presence of a positive COVID-19 test before submitting the claim? How can the organization ensure this occurs?
  7. When test results are pending, can the hospital hold the claim after discharge to determine whether the patient actually had COVID-19?
  8. Devote resources to contract management. Insurance companies accept and pay claims every day, but unless someone verifies whether those payments are correct per the most up-to-date contract, errors would fly completely under the radar. In addition, organizations may write off denials that could otherwise be appealed due to contractual errors on the payer’s side. When contracts change, payers don’t always upload the new information in a timely manner or at all. Incorrect contract loads—particularly during COVID-19 when policies and changed so frequently—could cause organizations to lose thousands of dollars annually. That’s why it’s important to charge someone with reviewing these contracts to ensure accurate payments. Get in the habit of doing this now to prevent revenue leakage.

Looking ahead to revenue integrity with proactive denial management

When it comes to revenue, several clichés come to mind: Don’t be penny-wise and pound foolish. An ounce of prevention is worth a pound of cure. A bird in the hand is worth two in the bush. You get the idea.

Regardless of what resonates with you, choose something, and take it to heart. Revenue integrity requires thorough and complete documentation as well as compliant coding. Billing correctly the first time around will save your organization a whole lot of time and money in the long run. Strive for a united front with coders and CDI staff. By cementing this team and creating a clinically-integrated revenue cycle, organizations will lay the groundwork for proactive denial management.

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