Appeals, Denials and Audits How to Protect Your Hospital Shirley Barton, President, AMR Debra Harrison, DNP, RN, AMR
Successfully defending and decreasing denials and appeals through education and persistence At the end of this session, participants will understand: The value of contract reviews Defending payer denials through appeals Using clinical documentation to justify charge audits and medical necessity denials Education requirements for all departments
If we paid for groceries like payers paid for healthcare... I know you said the total was $142 but that s not what I m going to pay. I am going to bundle all my drinks together the water, soda, wine and juice. I am not going to pay for the toilet paper, kleenix and paper towels. They are routine items. The new yogurt for kids is still experimental. I m not sure they will like it so I am not paying for it. So, at my rate of 48% of approved charges, that leaves $24.32. Thank you!
4 Prong Approach to Defending Your Hospital Contract Language Defending Denials Revenue Recovery Accurate Charging
Contract Language
Contract Language Define all aspects of Payer audits in either the main body of the Payer contract or as an amendment to the contract Define charges as your hospital s charge master in definition section of Payer Contract Do not agree to comply with every Payers policies in your contract Dispute Resolution language must be worded to provide a means to resolve Payer overpayment disputes
Hospital Audit Policy and Procedure Guidelines Purpose Outline billing audit guidelines for third party payer auditors to ensure External Auditors observe certain procedures to facilitate orderly review.
Scope of Your Audit Policy Limited to verifying charges of service rendered and supplies provided are accurate On site audits are required Copying of medical records is not permitted or removed off site Limit number of requests for audits External auditor cannot be a present or former employee
Procedure Guidelines Conduct a pre-audit prior to defending the external audit Audit both over and under charges Anticipate and discuss questions with Departments ahead of time
Hospital Policy on Charging Purpose: To clearly define charges, procedures, and supplies included in the room rate What is included in the room rate? Nursing Care (including vital signs, infusion therapy, post op care, wound care, etc.) Supplies/Equipment that are available to all patients and not individually ordered by an MD (e.g. alcohol wipes, skin cleaning products, gauze dressings, etc.) Meals and Meal Supplements
Hospital Policy on Charging Ancillary Services and what is separately billable Bedside procedures (e.g. PICC line insertion, chest tube insertion, those requiring anesthesia, etc.) In the policy, refer to Departmental guidelines for charging within departments
Defending Denials
Reasons for Denials Non-covered charges: Amount considered in the contracted rate Duplicate claim and already considered A referral or pre-authorization was required Minor transcription errors Bill went to the wrong insurance company Downgraded the DRG from what was billed Timely filing
Reasons for Denials (cont) Documentation did not support the level of care charged Inappropriate care Appropriate care but not supported in the medical record or as a best practice Care was considered experimental
Example of Non Covered charges Claim denied because a Speech Pathology charge was billed under Rev Code 440 and is not a covered service. Defense: Modified Barium Swallow Study with Video was performed by the Radiologist with the Speech Pathologist present. CPT 92611 is the procedure code that represents the speech-language pathologist's participation A description of the procedure can be found at: https://www.radiologyinfo.org/en/info.cfm?pg=modbariums wallow Included for additional documentation of this procedure: Radiology Report Speech Pathology Report with recommendations and plan Insurance paid at full contracted rate.
Example of no prior authorization Billed for the EGD performed Claim denied related to no authorization on file. Payer called and said we could submit documentation but wouldn't specify particular records that they wanted, just what would determine "necessity"). Sent the following documents: MD order and note of insurance approval History & Physical Operative Report Nurses Notes Insurance paid at full contracted rate.
Medicare Denials not easily overturned Fluoroscopy as part of the procedure Bags of 100 ml or 50 ml NS as part of the IV admixture for medication delivery Venipuncture charges (no more than one per day) Routine med/surg supplies (this can be very broad) Others?
Defending Denials Best Practice Critical to have trained and experienced auditors review all audit overpayment requests Participation of Hospital clinical staff is vital to defense Limit audits to certain hours and days that are convenient to you Include hospital clinical staff, coders, financial and managed care staff in discussions and outcomes
Team Collaboration Clinical Staff Physicians referring and employees Registration and Patient Accounts Insurance Contract Staff Collections It Takes a Village! Billing Unit Utilization Management (Case Managers) HIM/Coding
Transition from Fee-for-Service to Value-Based Care Denial management will play a major role in maximizing reimbursement Don t forget to include the coders and physicians in the process. Did you code for all conditions and procedures? Coding contributes to the evaluation of quality, translating to the highest reimbursement allowed
How to Decrease Payer Denials/Audits Make the Insurance companies work for every dollar by appealing the denial Insurance companies like to intimidate people by saying NO Do not give Insurers financial incentives to audit you If audits are not profitable, the Insurers will decrease the volume of denials and audits Government Accountability Office, Study in 2011: 6-40% of claims denied; 39-59% of appeals resulted in reversal of denial. Another national study average of 40% reversal of denials.
Tips for Success Understand why your claim was denied Know your time restraints. Deadlines can come quickly! Eliminate easy problems first Don t take the denial reason at face value, math errors are possible! Gather your evidence Submit the right paperwork Stay organized and develop a team approach
Action Plan Identify trends/issues and root causes Communicate any contract changes Stress the importance of documentation for all involved Create an insurance matrix timely filing submission Utilization management review for IP criteria and length of stay Educate all staff Patience: Appeals take time sometimes up to a year before a final decision is made Denial management = Denial prevention
What s the ROI on Denial Management? Able to identify trends and root causes of denials Increase payment recovery (or protect revenue loss) Compliance enhanced Reduce controllable write-offs Automate workflow for better efficiency
Accurate Charging
Clean and Current CDM Mapping charges to appropriate Rev codes Example: All Observation infusion, injection and hydration charges mapped to incorrect Rev code System flagged that Rev code as packaged and not billable so was zeroed out on the itemized bill. Potential $1.7 million annual error for this hospital Look for outdated charges (or never been charged)
Review of Charge Capture Did you charge for all the services provided? Review charge capture process for each department (e.g. outdated charge slips) Follow the charges through the system to final edited claim - assure the bill is reflected accurately
Charging Errors Most charging errors occur in the ED, Surgery and Observation stays Common reasons for errors of overpayment are: Billing for excessive or non-covered services Duplicate submission Payment for excluded or medically unnecessary services Payment for services that were furnished in a setting that was not appropriate to the patient s medical needs and condition
Documentation - The Root of All Evil If it is not documented, it did not happen Utilizing clinical information to defend denials Medical record is not a billing document Medical record is used to document clinical data on diagnosis treatment and outcome Education, education, education
Documentation Other documentation used in audits includes: Department charge records Treatment logs Individual service/order tickets Hospital protocols linking supply items to a specific service
Revenue Recovery
Revenue Recovery Retrospective Charge Audits Managed Care Payment Reviews Coding Reviews Hard work but someone has to do it!
When will Payers Audit Accounts? Insurance companies have a formula to determine when and which claims to audit, e.g. stop-loss Some, such as Medicare, use a computer sniffer to pull out potential errors in billing Difficult to defend multiple line items denied labor intensive!
Complex Challenges Number of Chart Audits increasing (outliers, MAP audits, computer generated audits) Outside auditors will not look for UNDERcharged items, only OVERcharged Items not covered because they are routine but routine is not clearly defined Bottom line: Audits are impacting revenue and cost to defend.
Is it worth it? One organization, 12 accounts audited by insurance: Total charges Initial Overcharges Negotiated Overcharges Unbilled added Final owed to insurance $2,492,122 $261,474 $103,460 $51,778 $51,682 10.5% 2.1% It s not zero but it is a reduction!
Action Plan Identify trends/issues and root causes Identify Departments consistently with late charges Determine action plans and Improve processes Stress the importance of attention to detail Educate all staff Help clinical staff recognize the connection between accurate documentation and financial success of the organization
Questions? Shirley Barton, President, AMR shirley.barton@amreview.net 904-982-3924