Denials Management

1. Denials Management

2. Objectives • To understand the types of denials. • Describe the Appeal Process. • Learn Denial Prevention strategies. • Differentiate between the different types of regulatory denial processes.

3. What is a Denial?? A Denial is an adverse payment determination issued by the Peer Review Organization (PRO) or a Managed Care Organization.

4. Types of Denials • Precertification/Elective Surgery • Admission • Continued Stay • Retrospective • Administrative/Technical • Medical Necessity

5. Types of Denials • Medical Necessity • When patient does not meet inpatient criteria • Example: Patient remains in the acute care setting for services that can be safely provided at a lower level of care. • Administrative/Technical • Any denial that results from not adhering to the payers contract provisions • Example: No notification to the payer when the member gets admitted.

6. Types of Denials (Cont’d) • Precertification /Elective Surgery • Request for an authorization and/or approval was made prior to the date of service and denied. • Admission • Request for an authorization and/or approval was made at the time the patient presented for treatment, and was denied.

7. Types of Denials (Cont’d) • Continued Stay • days DURING the inpatient stay that are not authorized and/or not approved by the payer. • Retrospective • a payer denial for an authorization of inpatient days AFTER the patient has been discharged.

8. Notice of Financial Responsibility (NOFR) • A denial letter is issued to the beneficiary and/or representative if the hospital has received notification from the Managed Care Organization that they will not authorize and/or approve the hospital services being provided. • Liability begins the next day after issuance of the NOFR.

9. The Denial Process Case Managers will be given notice of an denial in the following ways: • Concurrently • Upon discharge • Retrospectively Denial notices are given verbally by the on-site Managed Care Reviewer, via the phone, fax or by letter from the managed care company.

10. Strategies to Reduce Denials • Targeted Physician Education • Clear communication with Payers • Complete medical necessity reviews • Utilize your Physician Advisor (PA)

11. What is an Appeal? A mechanism by which the hospital can request a reconsideration of a denied day and/or claim.

12. The Appeal Process (Insert your facility’s appeal process)

13. Regulatory Agency Retrospective Review Process • Hospital Payment Monitoring Process (HPMP) • Program for Evaluating Payment Patterns Electronic Report (PEPPER) • Recovery Audit Contractor

14. HPMP Hospital Payment Monitoring Program • The purpose of HPMP is to measure, monitor, and reduce the incidence of improper fee for service inpatient payments, including errors in DRG coding provision of necessary services. • This monitoring program is for Medicare only.

15. HPMP Reporting Requirements • All hospitals are asked to review 30 charts per quarter. • Reviews can be performed concurrently or retrospectively. • If an error is identified after payment has been received, it is expected that the claim be rebilled.

16. HPMP Reporting Requirements (Cont’d) • The data results are reported utilizing the HPMP Quarterly Report form. • All reports are due on the last working day of the reported month. • Reports are faxed to your QIO.

17. PEPPER (Program for Evaluating Patterns Electronic Report) • Designed to help hospitals review statistics on their Medicare discharge data. • The basic focus is on statistical outliers.

18. PEPPER • The information is reported quarterly to the designated QIO. • By using these reports, the hospitals can more effectively address billing or payments concerns with physicians. • Hospitals are able to review & identify actual data. • Action Plans are formulated that may need further review.

19. Recovery Audit Contractor (RAC) Tax Relief and HealthCare Act of 2006 • Signed into law by President Bush in December 2006. • Requires CMS to use RAC nationally no later than January 1, 2010.

20. Recovery Audit Contractor (RAC) • An effort by the Centers for Medicare and Medicaid Services (CMS) to pay claims accurately and to give clear guidance on Medicare billing and payment policies. • The RAC requests medical records, reviews claims, and requests repayment for claims paid inaccurately.

21. Recovery Audit Contractor (RAC) (Cont’d) • The medical records are chosen by RAC. • Started as a 3 year pilot project in 2006. Three states are mandated to perform this project (Florida, New York, California).

22. References • Texas Medical Foundation for Centers for Medicare and Medicaid Services 2006. • FMQAI Section 1154 of the Social Security Act CFR S412.508. • HPMP fulfill the CMS Requirement to comply with the Improper Payment Information Act of 2002 (Public Law # (107-300).

23. References (Cont’d) • CMS (Centers for Medicare and Medicaid Services) 2006. • CMSA Core Curriculum for Case Management, Lippincott • Appealing and Preventing Denials Claims – HCMarketplace.com • BayCare Denial Database Training Manual.

24. Review Questions • What is a denial? • Types of denials include: • Administrative • Medical necessity • Retrospective • All of the above • True or False: Denials can only be given concurrently?

25. Answer Key • A Denial is an adverse payment determination issued by the Peer Review Organization (PRO) or a Managed Care Organization. • D • False