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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 • 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 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 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 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 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 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 Process Data Capture, Management and Reporting
Strengthen Your Denials Management Process Results Achieved: Denials Outsourcing
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 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 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 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 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 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 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 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 Process From Appeal to Approval to Payment • Assign accountability • Pay close attention to TPA’s • Close the loops • Follow-up and make it pay
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.
Thank You Case Management Covenants, LLC Columbia, MD 21044 www.cmcovenants.com410-715-4913