Our Denial Management Process and Lessons Learned

Mike JacobsonProvidence Health & ServicesOctober 17, 2013

Confirming our direction

Providence Health & Services

System Mission StatementAs people of Providence,

we reveal God’s love for all,

especially the poor and the vulnerable,

through our compassionate service

VisionTogether, we answer the call of

every person we serve: Know me, care for me, ease my way.

Hospital Spotlight

Providence Health and Services 2012 At A Glance

Volume Measurement

65,313 Employee’s (FTE)

2,981 Employed Physicians

691 Employed Advance Practice Clinicians

400 Physician Clinics

32 Acute Care Hospitals

7,288 Acute Care Beds (Licensed)

391,034 Providence Health Plan Members

19 Hospice and Home Health Programs

580,811 Home Health Visits

22 Assisted Living and Long Term Care Facilities

Confirming our direction

Denial Management Goal

Design a standard, accurate process to identify and collect all reimbursement, while reporting loss prevention opportunities to the correct department.

Denial Management Growth CycleHow We Built Denial Management:

1. Needed to define what a denial actually is2. Audit, audit, audit – Review all our transactions. Pre-

billing edits, CCI edits, adjustments / write-offs, ERA CAS codes, paper correspondence, partial reimbursements, refund requests, etc.

3. Standardize reason and remark codes4. Document current flows -- Appeal letters, hand-offs,

reporting, account documentation, follow-up steps, policies, etc.

5. Redesign workflows and update P&P’s6. Educate team(s) on appropriate adjustments and flows7. Implement 8. Audit, audit, audit

What is a Denial?

Now: Anything that is “stopping”, “slowing” or “reducing” payment. In or out of the business office control; we are responsible to identify, work and communicate

Example:

Pre-emptively resolving accident details; anticipating COB issues before notification/denial; medical necessity; length of stay; etc.

Then: Originally, we were focusing on anything that had write off.

Example:

no auth, timely filing, CCI edits, etc.

Streamlining Workflow by Standardizing Reason CodesChallenge: Standardizing denial reason codes from payers

1. Payers using different denial reasons; anywhere from 7 – 180 different denial codes being received

2. The teams would manually review the account to determine denial reason

3. Team had to change hats – flipping between different denial reasons

4. Process was cumbersome and difficult

Goal: To standardize this information/responses from payers, and drive processes based off that standardization. We want to direct the work to specialist on the denial management team that will work common (same) denials.

Streamlining Workflow by Standardizing Reason Codes – cont.

Approach: widespread review of all responses from payers, whether through electronic posting or manual cash posting

1.Created “denial crosswalk;” Taking all reason codes from payers and translate them into OUR denial code

Example: one payer had 5 different experimental/investigational denial codes – those are normalized into ONE internal code for us

2.By creating a normalized response, we now had less of an issue trying to determine what was denied

Streamlining Workflow by Standardizing Reason Codes – cont.

Streamlining Workflow by Standardizing Reason Codes – cont.

Now that we have a standardized response, we can drive denials in different directions:1. Automated response to a denial – based on identified denials,

we script responses versus having a person work them. (Example: no coverage, accident information, student status, etc. Even some medical necessity denials.)

2. Specialist review/respond to denial – specific denials that need interaction are driven to people who are responsible

for those denials.

Streamlining Workflow by Standardizing Reason Codes – cont.

Electronic Posting's

Manual Cash

Posting

Insurance corr.

Denial CrosswalkDenial Crosswalk

Med Necessity Denial – goes to

UM/QM/Dr.

Med Necessity Denial – goes to

UM/QM/Dr.

No Auth Denial: Goes to a

specialist to audit/appeal

No Auth Denial: Goes to a

specialist to audit/appeal

Automated Response:

Scripting letters to patients/payers

Automated Response:

Scripting letters to patients/payers

Denial Database

Electronic Statusing Functionalities

Challenge: Our market lacks standardization in claim statusing

Prior Process: 1. Claims “pended or delayed” at the insurance with untimely

or no communication to provider 2. 276 and 277 still remain inconsistent and inefficient3. Staff tracing claims on the payer webpage to identify the

payment status - 7 out of 10 were “claim in process”

Goal: Automated entire claims tracing process, so the right staff person is touching only claims needing additional work

Electronic Statusing Functionalities – cont.

You might ask “Why go looking for denials?”

1. The sooner it’s worked the sooner it’s paid

2. If resolved prior to formal denial, saving patients hassle of the denial process and from getting statements

3. Avoids multiple people touching or intervening once formal denial received from the payer

Electronic Statusing Functionalities – cont.

1. Daily extract of unpaid claims for specific payers based on predetermined criteria.

2. Using a scripting tool (Boston Workstation)• Enter account information into the payer website exactly like a

person would• Capture the claim status information from the payer website• Uploads (note) the claim status information back into our host • When claims are in “paid status”, next follow-up date is reset to

avoid further “touches”

Electronic Statusing Functionalities – cont.What does this get us?

•Automated claim statusing – using the computer to work for us•Reduce the need to do manual claim statusing; the team

avoids working on accounts that are “in process”•By working accounts that need our intervention – we create

payments, resolve accounts and avoid denials•Allows us to build a database of payer denials to track/trend

What do we need to keep an eye on?•When the payer changes their webpage, our script might error

out•Need to monitor changes the payer makes to their pending/denial codes – since that is driving our account follow-up

Electronic Statusing Functionalities – Results!!!

1. One PC can trace and document 5.1 accounts per minute – versus manually at 1 account per minute.

--On average 25% required additional; 75% don’t need intervention, won’t be on a work list and we won’t send statements

2. Claim statusing is happening during and outside our business office hours of operation.

3. Accounts needing follow-up are driven to the appropriate person based on pend/denial reason.

4. Strengthening of our report capabilities – since account notes are scripted with the claim status information, we can query the denial reason for each payer.

5. Scripting tool has a 100% attendance record.

Efficiencies Through Alignment of StaffChallenge:

1. All teams in the Business Office worked denials2. Inconsistent processes, accuracy, training and education3. Unintended write-off’s4. Inability to accurately report losses and opportunities5. Denials worked to varying degrees

Goal: 1. Use our tools to stratify denial work based on staff skill set and complexity

of work needed2. Sustainable model, not impacted by staff turnover or vacancies 3. Eliminate hand-offs between teams; one point of accountability; from

working denial, to appeal, to writing off4. Confidence that every possible dollar was being pursued adequately

Efficiencies Through Alignment of Staff – cont.

Because of our Denial Management structure, as well as Claim Statusing and standardization of denial responses, we are aligning the team to specialize in functions – specialists works denial types vs. a specific payer:

Efficiencies Gained By:1. Grouping Denials - All “like” denials are assigned to workqueue’s2. Driven to specialists

No Hand Off’s: A person specializes in a denial – they are experts in the adjusting off the account; appealing denials; and are responsible to audit denial adjustments each month

Sustainable: Each specialist is also responsible for keeping up-to-date documentation on what payers need when appealing the denial

Creates Depth: Cross-training about every 60 days so everyone is exposed to more knowledge and different types of appeals

Improves payer tracking/trending

Communicating Information Upstream

• To registration teams – identifying areas that new authorizations are needed, processes need updating or RTE issues

• To care departments – providing monthly detailed reports of services performed and dollars denied

• To contracting team – shows volumes of denials by payer and payers ‘rolling up charges

• To CFO’s –show how much currently denied, how much in appeal process and then how much is likely to written-off (based on appeal success by payer)

What Are the DM Results???

New Features In Production

•Score denials based on scale of dollars impacted and degree of difficulty. (slide)

•Payer scorecard – improve communication (slide)

•Self Service Reporting – care departments have access to running and viewing their

department related denials

In Production – Cont.Lo

w

$ R

etur

n

H

igh

Easy Complexity Hard

Member not eligible

Length of Stay Denial

No Authorization Denial

Prudent Layperson Appeal

In Production – Cont.

Questions?

Potential

• Script PEOB to payers

• Further identify how Remark codes are used with the goal of scripting medical records or auto-completing requests

• Partner with payers to develop improved Expand Line Item Postings – with the goal of getting line item denials.

• Develop internally Line Item Adjustments – so we can attribute adjusted dollars to denied charges accurately