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Combat Denialswith MachineIntelligenceErica FrankoSenior Vice President and Managing Director,Advisory ServicesnThrive
Agenda Align on Terminology Cost of Denials and Increasing Risks Managing Denials Rejection Prevention How Machine Learning and AI can help
The REAL Industry Overview andMarket Trends3
Denials Defined The refusal of an insurance company or carrier to honor a request byan individual (or his or her provider) to pay for health care servicesobtained from a health care professionalhttps://www.healthinsurance.org/ Any intentional reduction of payment resulting from the failure toprovide medically necessary services in an appropriate setting,failure to follow the payers’ technical guidelines, or failure toconsistently document for the services provided. (HFMA)Were you paid what was owed?
Vocabulary of Denials tClinicalCharge CaptureAdministrative ErrorsContractual DifferenceMedical NecessityConservative BillingPracticesMissing or InvalidAuthorizationsPricing ErrorsLevel of CareUntimely BillingCoordination ofBenefit/Eligibility IssuesIncomplete Accounts
Vocabulary of Denials ManagementFinal DenialWrite OffLost RevenueORInitial DenialDelay in CashBoth increase aged AR and typically require appeal or additional work
Cost of Denials: Revenue Cycle FunnelPatient Need for ServicesSchedulingRegistrationClinical EventsDocumentationCharge CaptureCodingBillingAdjudication Full/Accurate Payment Inaccurate/No Payment
Revenue Cycle FunnelPatient Need for ServicesSchedulingRegistrationClinical EventsInaccurate payments providestwo optionsDocumentationCharge CaptureCodingBillingReworkAdjudication Full/Accurate Payment Inaccurate/No PaymentLoss ofRevenue
Revenue Cycle FunnelPatient Need for ServicesCost of ReworkSchedulingRegistrationClinical Events Rework costs average of 25per claim1 Success rates vary from 55 to98 percent2 Rework adds least14 days tothe average number of daysto pay3DocumentationCharge CaptureCodingBillingAdjudication Full/Accurate Payment Inaccurate/No Payment1 (Leveraging Data in Healthcare: Best Practices for Controlling, Analyzing, and Using Data, by Rebecca Mendoza Saltiel Busch, CRC Press, 2016, ISBN-13: 978-1-4987-5773-7)2 (Leveraging Data in Healthcare: Best Practices for Controlling, Analyzing, and Using Data, by Rebecca Mendoza Saltiel Busch, CRC Press, 2016, ISBN-13: 978-1-4987-5773-7)3 its)
Understanding the Industry TrendImpact of Denials Issue Extends Beyond Financial Results
Denials Management
Revenue Cycle Opportunities for Denial ManagementScheduling Eligibility/MemberCannot Be IdentifiedAccessPatient CareHIM, ChargeCaptureBilling / Collection Benefit plan coverage Medical necessity Documentation Bundling Authorization Medical necessity Coding Benefit plan coverage Benefit maximumsexceeded Coordination ofbenefits Experimentalprocedure Experimentalprocedure Demographic mismatch Benefit maximumsexceeded Documentation Authorization Experimentalprocedure Eligibility Benefit plan coverage Documentation Eligibility Authorization Authorization Experimentalprocedure Pre-existing condition Authorization Timely filing Medical necessity Pre-existing condition Coordination of benefits Credentialing Medical necessity Duplicate Denials Documentation Coding (Missing orWrong Modifiers) Pre-existing conditions
Denials are Difficult to ManageChallengingappeals processResource andexpertiseintensivePerceived inabilityto capture thedenial dataDenial informationprovided bypayers irescoordinationthroughout theorganization
Measure in Pairs and OvertimeHFMA MAP Keys– Initial Denial Rate: Zero Pay– Initial Denial Rate: Partial Pay– Denials overturned by appeal– Denial Write-offs as a percentof net revenueReport and Trend– Total– By Payer– By Service Line– By Reason– By Diagnosis or DRG(Clinical)Clean Claim Rate & DenialsAR Aging & Denial Write-offs
What is the Initial Denial Rate?Write-off review alone does notanswer the important operationalquestions?Payor namesMeasuredenials involumesand dollars
What is the Rate of Appeal?Find theoverturnsweet spotUpheldWonTotalOverturn Rate42,38623,17365,55935% 288,633,288 219,799,726 508,433,01443%
How Effective are the Appeals?Are you appealing theright cases?Grand TotalDenials ReferredDenials AppealedAre there cases thatare unappealable?What is the lag timefrom referral tosubmission?172,561 710,543,657Not ResolvedOutstanding13,708 73,814,392ResolvedUpheld43,286 288,633,288Won23,173 219,799,726
What is the Cost to Recover?Appeals are the most expensiveand lengthiest way to collectwhat is rightfully owedReplace text box with chapter logoPrevention is a better way
Denial PreventionDenials are not addressable withoutunderstanding root causeManagers and analysts need timely andactionable dataVisibility and partnership is needed across therevenue cycle and organizationReplace text box with chapter logoA Comprehensivedenial preventionstrategy is required forlong term success
Normalize Data to Make it MeaningfulNo authorization?Review root cause and addressscheduling and access?N64 – claiminformation isinconsistent withpre-certified/authorized servicesANSI Codes are a result;they do not tell you why andwhat needs to be corrected!Bundling?Service is not separatelyreimbursable, review for possiblebilling edit?Service outside of authorization?Review with treatment team toidentify whether additional serviceswere performed and why?Not a denial?Notification from payor aboutknown reimbursement policy?
Scorecards– Denial trends– Overturn ratesPayor Websites and – Access to updated policies and proceduresProfessional Groups– Local chapters are a great source of informationWork with Payor Contracting Team– Build protection into contracts– Financial impact of policy changes21Payor Relations– Your representative needs to be part of your teamReplace text box with chapter logo
Connect Disparate Systems and Processesand Leverage TechnologyTypical Disparate Denials TechnologyPATIENT ACCOUNTINGAccount InformationDENIALSMANAGEMENTDenials WorklistCONTRACTMANAGEMENTUnderpay WorklistSELF PAYMANAGEMENTPatient CollectionMultiple disjointed ITSystemsInability to accuratelyidentify denial root causeInefficiencies routingaccounts to theappropriate teamReplace text box with chapter logo
Create Governance, Ownership, andAccountabilityDenials avoidance requires significanteffort across the revenue cycle.Committee/Task ForceRepresentationRevenue IntegrityWhile two-thirds of denials arerecoverable, 90% of denials arepreventable.Managed Care/ContractingCare Coordination (UM/UR)BillingCodingWithout sustainable processimprovement, technology andanalytics alone will only provide afraction of the possible resultshospitals can achieve.Replace text box with chapter logoPatient AccessITPayor Feedback/PartnershipsOrganizational Support
Management is Required; DenialPrevention is Key The goal is to move away from working denials to systemically preventing them– Beyond Bill Scrubbers and PAS Edits Recognize that eliminating 100 percent of denials is not possible– Continually improve and drive down top reasons– Small improvements can drive large financial results– Leverage technology to solve high volume low dollar issues Proactive vs. reactive– Denial Task Force– Payor Engagement– Root CauseReplace text box with chapter logo
Denials Prevention ThroughoutRevenue CycleMachine Learning Opportunities forDenials PreventionSchedulingAccess Benefit plancoverage Benefit plancoverage Benefit maximumsexceeded Benefit maximumsexceeded Eligibility Coordination ofbenefits Experimentalprocedure Authorization Pre-existingcondition Medical necessity CredentialingPatient CareHIM, ChargeCaptureBilling /Collection Medical necessity Documentation Bundling Authorization Medical necessity Coding Experimentalprocedure Experimentalprocedure Demographicmismatch Documentation Authorization Documentation Eligibility Benefit plancoverage Eligibility Experimentalprocedure Coding Authorization Pre-existingcondition Medical necessity Documentation Authorization Pre-existingconditions Timely filing Coordination ofbenefits
Productivity & Efficiency areChallenges with DenialsAuthorization?Automate analysis of root causeMachine LearningClassifiers Helpavoid DenialsRework cycles!Predictive RealTime Response inmilliseconds!Bunding?Automate Write-Off Detection &analysis for Bundling and UnbundlingDocumentation?Apply automation for CDI Alerting,Charge Capture, and Coding Support
Machine Learning Coupled to ChargeCapture Audit and Denials PreventionSupports Revenue IntegrityRevenue IntegrityProgram to recognize the fullvalue of every patient encounterAI & Machine Learning Impact the Revenue IntegrityProcess with Efficiency and Accuracy Improvements ProcessesChargeCoding andCDM reviewcapture and coding ning Full-servicerevenueintegrity Policies Practices Staffing Contractcontent
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Erica Franko, Senior Vice President and Managing Director, Advisory Servicesefranko@nthrive.com
effort across the revenue cycle. While two-thirds of denials are recoverable, 90% of denials are preventable. Without sustainable process improvement, technology and analytics alone will only provide a fraction of the possible results hospitals can achieve. Committee/Task Force Representation Revenue Integrity Managed Care/Contracting
