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Preparing for Healthcare Reform Strengthen Your Denials Management Process. NATIONAL AAHAM Educational Session February 6, 2009. Practical, Innovative, Medical Management Solutions. Strengthen Your Denials Management Process. HealthCare Reform Paradigm shift, emphasis now on cost control

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preparing for healthcare reform strengthen your denials management process

Preparing for Healthcare ReformStrengthen Your Denials Management Process

NATIONAL AAHAM Educational Session

February 6, 2009

Practical, Innovative, Medical Management Solutions

strengthen your denials management process
Strengthen Your Denials Management Process
  • HealthCare Reform
      • Paradigm shift, emphasis now on cost control
      • Increasing Rhetoric on hospital and physician driven costs
      • Hospitals to save $155 Billion in cost “Joe Biden” 7/8/09
      • Too Many people die needlessly at US hospitals “US News and World Report” 7/9/09
      • Too many tests drive high cost “President Obama”
strengthen your denials management process3
Strengthen Your Denials Management Process
  • Effects of Reform
    • Significant reimbursement pressure
    • Rapidly Shifting Health Care Landscape
    • Increased Competition
    • Changing hospital physician relationship
    • Increased tolerance for cost control measures
      • CMS Denials:
        • RAC denials
        • Emergence of Medicare “Never Events” denials
      • Increased Denials:
        • Medicaid MCO’s denials up over 100% in some MD hospitals
        • FFS Medicaid
        • Commercial payers
strengthen your denials management process4
Strengthen Your Denials Management Process
  • Response
    • Industry Consolidation
    • Focus on core competencies and maximize efficiencies
    • Fewer Product Lines, Niche Strategy
    • Stronger Physician Alliances (exclusive arrangements)
    • Outsource noncore services (many clinical services already outsourced.)
      • Maximize ROI
      • Enhance flexibility and maneuverability
      • Minimize disruption if such services become redundant
strengthen your denials management process5
Strengthen Your Denials Management Process
  • Out Sourcing Denials
    • Pros
      • With proper due diligence can select highest possible ROI (Contingency fee)
      • Immediate results no learning curve
      • Enhanced data capture and reporting capabilities
      • Expert advise on denials mitigation
      • Ability to change Vendor easily if dissatisfied with ROI
      • More Focus on Core activities
    • Cons
      • Loss of Control
      • Requires proper oversight
strengthen your denials management process6
Strengthen Your Denials Management Process

Key Components of an Effective Strategy

Primary Strategy - Proactive Prevention

  • Use data to identify key denial drivers
  • Enhance current UM processes
  • Build processes to minimize denials

Supporting Strategy - Denials Recovery

  • Aggressive appeals process maximizes claims recovery
  • Close the loop between approval and payment
strengthen your denials management process7
Strengthen Your Denials Management Process

Data Capture, Management and Reporting

  • Audit existing data to identify opportunities for improvement including areas of RAC emphasis
  • Use audit results to develop processes that address identified areas of opportunity
  • Enhance existing UM/CM/SW processes based on audit findings
  • Develop educational sessions as needed
  • Re-measure and monitor impact of newly implemented processes
strengthen your denials management process8
Strengthen Your Denials Management Process

Data Capture, Management and Reporting

strengthen your denials management process9
Strengthen Your Denials Management Process

Results Achieved: Denials Outsourcing

strengthen your denials management process10
Strengthen Your Denials Management Process

Building The Process - Minimize Denials

Process Improvement Initiatives

  • UM/CM/SW Process Enhancements

- Improve communications with payors

  • Education

- Use data to identify educational activities for staff

- Employ external resources as needed

  • Short Stay Denials
      • RAC emphasis
strengthen your denials management process11
Strengthen Your Denials Management Process

Short Stay Denials

  • Case manager assigned to ER to review admissions for select diagnosis based on audit results
  • Consult done in ER prior to admission, if possible
  • Consider implementing rapid chest pain protocol
  • Educate ER staff on admissions criteria for commonly denied diagnosis
strengthen your denials management process12
Strengthen Your Denials Management Process

Supporting Strategy

The Appeals Process

Types of Appeals

  • Informal peer-to-peer as soon as denial is identified, 1 day of denial
  • First Level appeal with medical records, 15 to 180 days depending on payor
  • Second and Third Level for some payors, 30 to 90 days
  • External appeals - usually through the MIA or CMS

Complexity of Appeals

  • Multiple payors  Multiple rules
  • Multiple levels  Multiple time frames
  • Multiple regulators
strengthen your denials management process13
Strengthen Your Denials Management Process

The Appeals Process

A Staged Approach to Appeals Management

Automation and

Data Management

Research & Approval Strategy Development

MCO Submission

Denial Mitigation through Education

MCO Process Management

Appeal Response Determination Process

Denial Process & Intervention Reporting

Payment Management Process

strengthen your denials management process14
Strengthen Your Denials Management Process

The Appeals Process

Identifying the Denial

  • EOB is the gold standard
  • For carriers with short appeals timeframes, the denial must be identified before the EOB is received
  • Most denials are identified through the denial letter
  • Use the payor’s daily log for identifying denials
strengthen your denials management process15
Strengthen Your Denials Management Process

The Appeals Process

The Medical Necessity Argument

Critical Components Necessary for Success:

  • Timeliness is critical and requires a complex and efficient process to meet the varying requirements of numerous insurers
  • Medical necessity knowledge is key to a successful appeal and often requires the leadership and input of a UM trained physician
  • Intimate knowledge of criteria sets (Milliman, InterQual etc.)
strengthen your denials management process16
Strengthen Your Denials Management Process

The Appeals Process

Managing the process is critical:

  • All documentation must be sent certified
  • Process difficult to manage without a tracking system
  • Payors fail to return 35% of initial appeals
  • Only 35% to 60% of appeals are completed within the required 30 days
strengthen your denials management process17
Strengthen Your Denials Management Process

The Appeals Process

Once a response is received, it’s decision time:

  • If denied, should:
      • a Level 2 or 3 be pursued?
      • the account be closed?
      • an external review be filed?
  • Up to 25% of Level 2 or 3 appeals can be overturned
  • If approved, then make it pay
strengthen your denials management process18
Strengthen Your Denials Management Process

From Appeal to Approval to Payment

  • Assign accountability
  • Pay close attention to TPA’s
  • Close the loops
  • Follow-up and make it pay
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Strengthen Your Denials Management Process

Summary

  • Health Care Reform Will Change Many Business Practices
  • Out Sourcing Denials Mitigation Services Makes Good Business Sense.
  • Understanding The Denials Process will Help You better Manage in-house or Outsourced Services
  • Data capture, Reporting and CQI are Key
  • Expect and Demand Strong Results.
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Thank You

Case Management Covenants, LLC

Columbia, MD 21044

www.cmcovenants.com410-715-4913