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The “Right” Approach to Denial PreventionTammie Phillips, RNVice President, BusinessConsultingMcKesson Health SolutionsJohn HolyoakDirector of ProductManagementRelayHealth Financial
Agenda The Denials Challenge Analysis Enables Strategic Action Revenue Cycle and Clinical Prevention Strategies Q&A Resources27/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2016 RelayHealth.
Our Denial Challenges1 in 5Claims30-40%TextOf denials are caused byregistration errors2Denied ordelayed13% netrevenue losscaused bydenials3ImpactDenials are one of the most costly revenue cycleissues and greatest concerns to revenue cycle leadersSources:1PNC Financial Services Group, Automated Billing/Payment Process Can Reduce U.S. Health Care Costs without Sacrificing Patient Care, November 20072HBI Academy Research, Registration Errors Significantly Impact Reimbursements3Driving the Denials Management Initiative, a Renewed Focus, The Advisory Board Company, Washington, D.C., web conference, July 2009
The Costs Continueoverall revenue cycle operating costsfrom claims rework*ReworkEligibility /RegistrationErrorsClaimPayerDenial Days of Missed Opportunity Higher A/R Days*Steven Huddleston, “Creating a Healthy, Unified Revenue Cycle” HFMA Revenue Cycle Strategist, November, 2012
Where Do Most Denials Occur?Denial ReasonNationalRegistration / Eligibility28.0%Duplicate Claim / Service19.2%Service not covered15.0%Missing or Invalid Claim Data11.7%Medical Documentation Requested6.5%Authorization / Pre-Certification5.8%Medical Necessity5.4%Medical Coding4.3%Untimely Filing3.1%Coordination of Benefits1.1%Represents claims released to payers from January 2014 through October 2015 that were denied.Only includes hospitals that process remits through RelayHealth Financial and have given RHF data rights.57/19/201620%of claims aredenied1 25Cost to reworka claim21 TARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.http://www.hfma.org/Content.aspx?id 32086)
Denial Analysis Enables Strategic ActionRoot CauseDetermination Where are denials originating? Patient Access and Registration Insufficient Documentation Coding/Billing Errors Payer Behavior Utilization/Case Management Which has the greatest impact?Prioritization A certain physician A particular service line A specific payer A certain type of code Process redesign in both the clinical andrevenue cycle areas of opportunityArmed with an analysis, you can begin to prevent denials more strategically67/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Drive Down Denials with AnalyticsWho:600 bed hospital system in SoutheastProblem: Charges being denied by payers for Untimely FilingSolution: Investigated how they were submitting claims from the HIS andfixed one issue. Created three timely categories to purgeexpired claims and monitor claims approaching the deadline toavoid future timely deadlines.TheResult:77/19/2016The value of future write-off savings is roughly 2M!PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.Data source: RelayAnalyticsTM Acuity
Prevention Strategies - EligibilityEligibility denials often occur when apayer is no longer responsibleRoot-cause analysis may reveal thatstaff isn’t performing a thorougheligibility verificationConfirm eligibility at scheduling, threedays before elective visits, on the dateof service, and before submitting theclaim.For emergency patients, check eligibilityat POSContact patients who underwentunscheduled procedures within 24hours87/19/2016Denial ReasonNationalRegistration / Eligibility28.0%Duplicate Claim / Service19.2%Service not covered15.0%Missing or Invalid Claim Data11.7%Medical Documentation Requested6.5%Authorization / Pre-Certification5.8%Medical Necessity5.4%Medical Coding4.3%Untimely Filing3.1%Coordination of Benefits1.1%PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Prevention Strategies – Registration Errors Revcycle success starts atRegistration Apply business rules toexamine registration data to helpensure it’s accurate, completeand consistent Fix errors in real-time workflowto prevent downstream denials97/19/2016Denial ReasonNationalRegistration / Eligibility28.0%Duplicate Claim / Service19.2%Service not covered15.0%Missing or Invalid Claim Data11.7%Medical Documentation Requested6.5%Authorization / Pre-Certification5.8%Medical Necessity5.4%Medical Coding4.3%Untimely Filing3.1%Coordination of Benefits1.1%PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Drive Down Denials UpfrontRegistration and Eligibility Issues600-bed health system in SouthWho:Problem: Needed to reduce its denial rateSolution: Used data to understand extent and value of issues. ExposedTheResult:Registration/Eligibility issues as a primary root cause ofdenialsOver four months, Registration/Eligibility Denial Rate plummetedfrom 11.66% to 1.23%. Cash value: 2.4M!4months107/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Prevention Strategies – Authorization andMedical NecessityDenial ReasonNational Denials for Authorization andMedical Necessity are costlyRegistration / Eligibility28.0%Duplicate Claim / Service19.2% Pre-auth issues are usuallydue to:Service not covered15.0%Missing or Invalid Claim Data11.7%‒ Failure to secure the auth‒ Clinically-driven change in theprocedure – most often thecause of chronic denials117/19/2016Medical Documentation Requested6.5%Authorization / Pre-Certification5.8%Medical Necessity5.4%Medical Coding4.3%Untimely Filing3.1%Coordination of Benefits1.1%PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Pre-Authorization CostsOnly 7%of Authorizationtransactions areelectronicCAQH, 201678%Of physicians sayeliminating Preauthorizationhassles is “very important”AMA Survey of Physicians, May 2010Pre-registration staffspend up to 9 hoursper FTE per week onhold with payersPre-Auth is Costlyto both payers &providers 35-105 per pre-auth-Large Florida Health SystemInternal McKesson AnalysisPreAuthorizationOverviewPayer Perspective 14Average provider costper manualAuthorizationCAQH, 20161/3of KneeReplacementsnot necessaryArthritis &Rheumatology,June 2014U.S. Provider Cost ofPayer Administration 31BHealth Affairs, May 14, 20098% Overlapin authorizationrequirements for 1300procedures across 23major health plansMcKesson Analysis, 2016
Prevention Strategies – Pre-Authorization13Defined preauth rolesTechnologyenabledprocessAutomatepayer policymaintenanceDesignated teamshould own theprocess to ensurea reliable andstable approachAutomatescreening andverificationembedded inworkflowAutomate thelocation, captureand maintenanceof payer authpolicies7/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2015 nautomation providesdefinitive answersabout whether aservice needs preauthorization
Denial Prevention & ManagementEffective denial prevention happens throughoutthe entire revenue cycleBilling / ClaimSubmission Efficient claims management process Comprehensive claim editing toimprove first pass acceptance Validate claim for missing informationand complete147/19/2016PostSubmission Monitor claim status for potentialissues Submit appeals for initially deniedclaims Utilize analytics to conduct deep diveanalysis into processes for strategicimprovementPROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Managing Denials from a Clinical Perspective157/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
PresentClinical Best PracticesNot Present ConsistentlyFocus Required16Visible Leadershipand Clear VisionED tConsistency ofProcess andReview FrequencyDedicatedPhysician AdvisorEffective use ofEvidenced BasedContentEffective Level ofCareManagementRobust ClinicalDocumentationData DrivenProgram at thestaff levelPROPRIETARY AND CONFIDENTIAL. Copyright 2016 McKesson Corporation and/or one of its subsidiaries.
Strategies to Help Prevent Medical Necessity Denials1. Ensuring medical necessity validated prior to every admission(ED, direct, transfers and elective admissions)2. Ensure medical reviews are being conducted on admission and everycouple of days during the hospital stay to address discharge planninggaps3. Ensure evidenced based content is being used correctly4. Ensuring documentation supports decisions made and level of care;educate physicians on the critical role they have in this key areas5. Ensure nursing and other departments are equally invested inlength of stay management6. Ensure the medical review demonstrates holistic understanding of thepatient with a clearly articulated medical and discharge plan177/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2015 RelayHealth.
Q&AResources:ReduceMyDenials.com – overall denial strategy resourcesHealthyRevenueHealthyFuture.com – pre-authorization resourcesDenyDenials.com - medical necessity resources–For More Info: 800-752-4143187/19/2016PROPRIETARY AND CONFIDENTIAL. Copyright 2016 RelayHealth.
Our Denial Challenges Text 1 in 5 Claims 3% net revenue loss caused by denials3 30-40% Impact Denials are one of the most costly revenue cycle issues and greatest concerns to revenue cycle
