Denials Management April 2017 - PowerPoint Presentation

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Denials Management

April 2017Slide2

Presenters2

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Peter

Angerhofer

Peter

is a principal at Colburn Hill Group; he brings experience in operations, strategy and health policy to both daily operations as well as long-term vision.

Jeff MeansJeff is a principal with Colburn Hill Group, and works in product development as well as operational consulting. He has designed, supervised the development and launch of several successful technologies. Slide3

What we will coverIdentify the common problems faced by efforts to improve Denials Management

Provide Key Metrics and Benchmarks

Review Best Practice Denials Management processes

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IntroductionDenials represent the largest category of avoidable financial leakage for most health systems (2% - 6% of NPSR)

There are countless tools, vendors, and programs available … yet the problem persists

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At best, most Denials programs keep lost revenue from increasing when they should be driving steady improvements over timeSlide5

Common Problems with Denials ManagementDenials come in many shapes and sizes

The goal posts keep moving

Most analytical tools are inadequate

Most Denials programs are under-resourced

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This presentation suggests a structured approach to solving the problemSlide6

Key MetricsInitial Denials

Denials Write Offs

Denials in Active Accounts Receivable

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These metrics need to be considered holistically and in context of one another. Systems to track performance at this level can be costly, but are essential to driving systematic improvements.Slide7

Initial DenialsDefinition: Remittances from payers that indicate lack of payment for service(s) – usually in the form of an ERA (835) or paper remittance advice

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PROs

Timely feedback

Process

focus

CONs

Difficult to calculate

Payer anomaliesSlide8

Initial Denials – Example Scorecard8

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Ensure common definition of denial categories

Summarize in a format that enables benchmarking

Aggregate enough history to show relevant trendsSlide9

Write Off AdjustmentsDefinition: Amount ($) adjusted to transaction codes mapped to “denials” on the general ledger

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PROs

Measure of actual loss

Financial focusCONs

Variable use of codesSignificantly lagging indicatorSlide10

Denial Write Offs – Example Scorecard10

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Measures how current the write offs are

Compare the trend in Amount written off and Age for contextSlide11

Active AR with DenialsDefinition: Amount ($) of Active AR that has been initially denied

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PROs

Indicator of future risk

Financial

focus

CONs

Difficult to measure

Requires workflow systemSlide12

Denial Write Offs – Example Scorecard12

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Critical Age Group for Follow Up

Most “At Risk” Age GroupSlide13

Key Elements of an Effective ProgramOrganizational Commitment

Cross-Functional Team

Dual Approach

Denials Recovery

Denials Prevention

Measurement SystemDisciplined Project Management Process

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Organizational CommitmentOrganization-wide goals around reducing inefficiencies and leakage from Denials

Communication across administrative and clinical chains of command

Realistic expectation of time and resources required to make improvements

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Health system leaders should include regular denials management updates in their organizational updates / financial performance communicationsSlide15

Cross-Functional TeamRepresentation Across Revenue Cycle Areas:

Patient Access

Patient Accounts

HIM / Coding

Revenue Integrity

Case Management / Utilization ReviewPhysician AdvisorClinical Denials Appeals Lead15

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Dual ApproachEffective Insurance Follow Up Processes in Patient Accounts

Dedicated / Skilled Clinical Appeal Team

Escalation Process

KPIs:

Recovery Rate

Denials in ARTurn-around Time

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Process Engineers

Dedicated time and resources to perform process improvement initiatives

Cross-functional collaboration

KPIs:

Initial Denials

Process Metrics

Denials PreventionSlide17

Denials Prevention Process17

Systematically measure performance to highlight problem areas

Drill-to-detail to understand specific upstream defects

Rewrite processes to reduce defects before they happen

Implement changes in the organization

Measurement & Data Analysis

Process Engineering & Change Control

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Denial Prevention ExampleProblem: No Auth

denials in Radiology due to Authorized Procedure is not the same as the Billed Procedure

Root Cause: Radiology technicians read an order differently than financial clearance agents

Solution:

Develop common understanding of orders

Regular reviews between radiology and financial clearanceFeedback to most affected physicians

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Denials Team Meeting AgendaMetrics ReviewReview of Follow Up Actions from Previous MeetingUpdates from Functional AreasRetrospective Case Reviews

Summarize New Follow Up Actions

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Conclusion

The problem of Denials is common, across systems of all sizes and specialties, and there are a number of approaches to dealing with Denials. A Denials Management program needs to start by:

Quantifying your current performance level;

Estimating the value of achieving benchmark performance; and

Prioritizing your opportunity areas.

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For more information on Denials

Please visit the Business Intelligence (BI) Denials Management Demonstration Portal available for your use at

http://www.colburnhill.com/demo-bi.html

For additional information, feel free contact CHG at

info@colburnhill.com

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