Denial management is a broad term that encompasses the entire revenue cycle in an organization.  From the first notification of a procedure, test or encounter to the notification of the denial, the potential for a denial is real.  That potential can be lessened if the organization has proactive strategies in place to manage denials.  Below are the top 5 strategies that will help the organization with denial management in the mid-revenue cycle.    

  • The goal of denial management should be to decrease the overall number of denials, not to work “in the moment” and appeal each denial without asking questions.  Questions should be asked throughout the entire process because it drives best practice initiatives that assist in decreasing the amount of denials. 
  • Know the Numbers.  Some groundwork is needed to do a deep dive into the data.  Denials can come from anywhere in the revenue cycle, and knowing the number of denials in CDI or HIM, for example, is a good start, but it is only the tip of the iceberg.  The data can be broken down by timeframe (month, quarter, etc.) and previous year comparative studies can be performed.  The data can be further defined by type of denial (medical necessity, clinical validation, prior authorization, etc.), and by common factors (principal diagnosis, DRG, HCC, mortality record, trauma, length of stay, payer, provider, setting, etc.).  Following a preferred form of root cause analysis will be helpful here as questions are asked regarding the data.  Involve others in this analysis, but caution not to rush this step even if the answer is suspected. 
  • Use Additional Resources in an Appeal.  There should be no silos in healthcare; the entire healthcare organization is a team with one very important commonality – the patient.  From the moment of first notification to discharge, valuable information exists in the patient’s medical record as well as in related sectors.  The software that the CDI professional uses for their documentation, the queries, and the coding professional’s documentation are all adjunct sources of information that can be used and may save time in an appeal because that information is taken directly from the medical record. 
  • Provide Downstream Education.  If education/acknowledgement of the denial data is not streamed back to the individual department, there is no opportunity for process improvement.  Transparency and communication with all departments who have a need to know is integral in denial management as well as in the reduction of denials and appeals.  Downstream education is a powerful tool that can assist with denial reduction by providing education proactively and correcting the deficiency prior to billing instead of receiving the same type of denial repeatedly.
  1. The Best Denial Management Strategy is Denial Prevention.  It is possible to suspect where the problems and/or solutions lie even before the data is reviewed, although confirmation is needed through a root cause analysis.  It has been said that the best defense is a good offense and that is fitting here.  Denial prevention is the key to a good offense.  An organization stands to lose more than the reimbursement and quality achievements due to the time, FTEs, and other resources essential in denial management.  Likewise, a one-step forward, two-steps back approach is not a sound plan for publicly reported metrics. 

The key to forward motion in denial prevention is clinical validation.  By ensuring strong clinical validation is present in the medical record, the number of successful appeals will dramatically increase and the denials should subsequently decline.

Denial prevention is best practiced via a team approach by including CDI, HIM, Quality, Denials/Compliance, and Medical Staff representation in regular meetings, thus trends and opportunities for denial prevention can be identified early.  

Do you have a comprehensive denial prevention plan in place?  MedPartners has the experts available who can assist with clinical validation while establishing or strengthening your denial prevention plan.  

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