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Dispute Resolution/ External Appeals Process Best Practices. Presenter: Frances Scott, RHIA Director of Operations Empire State Medical, Scientific and Educational Foundation, Inc. About Us. Founded in 1984 as a medical peer review company

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Dispute resolution external appeals process best practices

Dispute Resolution/External Appeals ProcessBest Practices

Presenter: Frances Scott, RHIA

Director of Operations

Empire State Medical, Scientific and Educational Foundation, Inc.

About us
About Us

  • Founded in 1984 as a medical peer review company

  • URAC Accredited: Independent Review Organization – Comprehensive

  • Offices in Westbury and Camillus, NY

  • Panel of physician specialists Board Certified in most specialties

  • Currently with contracts to provide medical review services for State agencies, hospitals, payors and private entities


Relevant experience
Relevant Experience

  • Provide dispute resolution/external appeal services for hospitals and payers throughout NYS

  • Serve as a Medicaid Peer Review Agent through subcontract with IPRO

  • Perform coding/compliance reviews for physician offices throughout NYS


Types of issues reviewed
Types of Issues Reviewed

  • Coding and/or DRG-SOI Assignment

  • Level of Care

    • Acute inpatient versus outpatient

    • Acute inpatient versus observation

    • Acute inpatient versus ambulatory surgery

    • Length of stay for both medical and psychiatric admissions

    • Experimental/investigational treatment/procedures


Review criteria utilized
Review Criteria Utilized

  • UHDDS Guidelines

    (Uniform Hospital Discharge Data Set)

  • ICD-9-CM Official Guidelines for Coding and Reporting

  • 3M/HIS Grouper/Pricer

  • Interqual Acute and Pediatric Level of Care criteria

  • Interqual SIM Plus™

  • MCG Inpatient and Surgical Care Guidelines

    (formerly Milliman Care Guidelines)


Dispute resolution agreement
Dispute Resolution Agreement

  • Providers and Payors contractually agree to an internal appeal process

    • The provider-payor contract generally defines an internal appeal process that must be followed prior to a provider seeking an external or outside review

    • The internal process generally has 2 levels of review – Initial review and Final review

  • Providers and Payors contractually agree to an external or independent dispute resolution/appeal process

    • This process is defined contractually by the hospital and payor


Items your contract should address
Items your Contract should Address

  • Internal Appeal Process

    • Specify the timeframe for initiating the appeal process

    • Specify the number of reviews available and that must be completed through the internal process (ie, initial review, final review)

    • Define the steps for initiating each step of the internal appeal process

    • Define the issues that may be appealed

  • External Appeal Process

    • Designate the entity to be used as your dispute resolution/external appeal review agent

    • Specify the timeframe for initiating a review with the outside/independent review agent

    • Specify who will initiate the outside/independent review (provider, payor or either)

    • Define the issues that may be appealed


Items your contract should address con t
Items your Contract should Address (con’t)

  • External Appeal Process (con’t)

    • Specify if one or two levels of review will be available through the outside/independent review process

    • Determine who will be responsible for the review fee paid to the outside/independent review agent

    • Contract should address if both parties will be bound by the decision of the outside/independent review agent

      Utilization Review and Health Information Management staff should have some input into the contract process whenever possible!

      Educate staff regarding the Internal and External Appeals Processes.


Review types
Review types


Dispute resolution process
Dispute Resolution Process

  • Requesting party submits medical record and application for review

  • Non-requesting party is notified that case was submitted and is given an opportunity to respond with comments or additional documentation

  • After receipt of all documentation, the case is referred to a coder (DRG/coding issues) or a nurse (utilization review issues)

  • Case is reviewed and summarized by the coder or nurse

  • Case is referred to a physician specialist for review


Dispute resolution process con t
Dispute Resolution Process (con’t)

  • If case involves a technical coding issue, the coder will summarize the case and make a final determination

  • Once the physician specialist has reviewed the case, it is referred back to the coder or nurse who will finalize the case including the physician specialist’s comments and determination

  • Review results are published and forwarded to both parties


Best practices submitting or responding to dispute
Best Practices – Submitting or Responding to Dispute

  • Documentation is Key!!

  • State clearly the issue in question when submitting a case for review

  • State clearly your position and supporting argument

  • Cite any applicable medical criteria and/or coding guidelines to support your position

  • Medical record should be complete

  • Medical record should be legible

  • Physician documentation should support the issue

    • Challenge with the Electronic Health Record (cut and paste, duplicate copies)


How not to respond
How NOT to Respond!

Leave emotion out…

  • “Whomever denied the admission of an 89 year old woman with unsteady gate and shingles is out of their mind.”

  • “…if the patient is unwilling or unable to participate, can he safely be discharged from the ER? Is the staff of the ER supposed to dump him at the curb and ask him to crawl away?”


Case 1
Case #1

Case submitted by hospital because payor disagrees

with secondary diagnosis dehydration (276.51).

Hospital Argument:

“Briefly, this case involves a 70 year old male admitted emergently with nausea, vomiting, weakness and passing out on the day of admit. The admission diagnosis on the ER record was weakness and dehydration. The MD ordered IV fluids for treatment of the dehydration. These were continued through day #4 of the hospital stay. The dehydration was an additional diagnosis that affected this episode of


Case 1 con t
Case #1 (con’t)

Hospital Argument (con’t)

care. It meets the criteria for a secondary diagnosis as it was clinically evaluated, required treatment and increased nursing care. The…diagnosis of hypovolemia is included in the discharge summary as a final diagnosis.”

Parts of record referenced by hospital:

Discharge summary

Admission physician order

Emergency room record


Case 1 con t1
Case #1 (con’t)

Payor Argument:

“We continue to maintain that this patient was not dehydrated. This 70 year old man with adrenal insufficiency presented with weakness and episodes of falling with inability to get up. His BUN/creatinine was 7/0.9 which is not consistent with dehydration, but rather with hypokalemia which we agree the patient had. Dehydration is deleted.”

Parts of the record referenced:

None specifically referenced


Case 1 con t2
Case #1 (con’t)

ESMSEF Decision:

“Per our physician specialist, the principal reason for this patient’s symptoms and admission is adrenal crisis from acute renal insufficiency. Weakness, hypotension and dehydration are medical consequences. He also had hypokalemia during this admission. Dehydration is a valid diagnosis and was treated during this hospital stay.”


Case 2
Case #2

Case submitted by hospital because payor disagrees with the principal diagnosis diverticulitis (562.10) and secondary diagnosis COPD (496).

Hospital Argument:

“This was a 70 year old female admitted with abdominal

pain and diagnosed with diverticulitis. The patient’s history

was significant for COPD. This was a complicating

diagnosis that was present on admission and affected this

episode of care. It was documented by the physician in

the H&P, progress notes and on the face sheet. The COPD

was clinically evaluated, treated with Combiventinhaler

and required nursing monitoring. It was correctly assigned

for this episode of care.”


Case 2 con t
Case #2 (con’t)

Parts of record referenced by hospital:

Face sheet

Discharge summary

Admission physician order

Consultant report

Physician progress notes


Case 2 con t1
Case #2 (con’t)

Payor Argument:

Hospital Code: Payor Code:

56210 5533

V1011 3569

496 7140

3569 4019

7140 57420

57420 4556

Parts of the record referenced by payor:

None specifically referenced


Case 2 con t2
Case #2 (con’t)

ESMSEF Decision:

  • “The principal diagnosis is clearly documented as diverticulitis. The face sheet, progress notes, CT can report and consultation all document diverticulitis as the reason for admission. Concerning the secondary diagnosis of COPD, coding guidelines allow certain chronic conditions to be included as a secondary diagnoses. As stated in the ICD-9-CM Official Guidelines for Coding and Reporting, “Code all documented conditions that coexist at the time of the encounter/visit, and require or affect patient care treatment or management.”


Case 2 con t3
Case #2 (con’t)

As further clarified inAHA Coding Clinic, 1992 2nd Quarter, pg 16-17, “COPD is a chronic condition which would affect the patient for the rest of his life. Therefore, if there is documentation in the medical record to indicate that the patient has COPD, it should be coded. If the physician mentions COPD only in the history section and then again on the attestation with no contradictory information, the condition should be coded. The same would be true for other conditions such as diabetes mellitus, hypertension and Parkinson’s disease”. In addition the patient was treated with Combivent. The hospital has coded the case correctly.


Case 3
Case #3

The case was submitted by the hospital because the insurance carrier disagrees with the secondary diagnosis of prophylactic isolation (V07.0).

Hospital argument:

We queried the physician and he agreed that patient was in isolation.


Question to physician: “I see the patient was an “N” code. Was the patient in isolation?”


Case 3 con t
Case #3 (con’t)

Physician response to Query: “I think so.”

ESMSEF Decision:

There is no documentation in the medical record to support that the patient was in isolation. The code for prophylactic isolation (V07.0) is denied.


Case 4
Case #4

The dispute was initiated by the hospital because the insurer denied the acute inpatient hospital stay as not medically necessary claiming the member could have been managed at an observation level of care. Chest Pain Milliman Care Guidelines were referenced for this review. A physician Board Certified in Cardiology was involved in this determination.

ESMSEF Decision:

Per our physician specialist, this was a 49 year old female with a past history of hypertension, GERD, hyperlipidemia, obesity and asthma, as well as, a family history of myocardial infarction. She presented with chest pain at rest with some typical and atypical features. Initial


Case 4 con t
Case #4 (con’t)

vital signs were B/P 158/105, P 81, R 18 and T 98.7. Lab values were unremarkable and her EKGs showed normal sinus rhythm with borderline criteria for old inferior wall MI. She was admitted overnight and despite having recurrent chest pain, a cardiology consult the next morning recommended that her chest pain was of a very low likelihood to be ischemia and that an out patient stress test could be performed. She was discharged with outpatient cardiology follow-up. The HEART score for this patient was 3. The history was of low suspicion, EKG was virtually normal, age of 49, had 3 or greater risk factors for atherosclerotic heart disease and her troponin level was normal. Calculated to a score of 3, which was a low probability for a cardiac event in the next 2 weeks only 8% which was also of low risk. Given all these findings and based on the documentation submitted, this acute admission was not medically necessary, however, observation level of care was indicated.



  • Ensure that dispute resolution/external appeal services are defined in your provider/payor contract

  • Understand all required steps and timeframes of the internal and external processes

  • When submitting a case or responding to an appeal, support your argument with specific portions of the record, nationally recognized guidelines and criteria and/or physician documentation

  • Remember, Documentation is Key!!


Thank you

Thank You!

Frances Scott, RHIA

Director of Operations - ESMSEF