presents Establishing a Lean Quality Approach to Denial and Appeal Management

Is the glass half empty… …or half full?

The Staggering Cost of Denials An additional 6% of gross revenue is lost to underpayments. 2 Nearly 13% of annual provider revenue is at risk to payer denials nationwide. 2 High denial rates impact both the speed at which you get reimbursed and the administrative costs associated with being reimbursed. It is estimated that the cost of claims rework is as high as 20% of overall revenue cycle operating costs Steven Huddleston, “Creating a Healthy, Unified Revenue Cycle” HFMA Revenue Cycle Strategist, November, “Keys to Effective Denial Management” Emdeon Compass, March, 2010

ICD-10 Implementation

Fable of the Lion & the Gazelle

Lean Process Improvement Henry Ford Production Line Efficiency — Flow

Measuring KPI’s Measuring KPI’s Timing Timing Sequencing Sequencing Inspection Inspection Supervision Supervision Rebills Rebills Adjustments Adjustments Appeals Appeals Identifying Identifying Analyzing Analyzing Qualifying Qualifying Denials Denials Zero Pays Zero Pays Short Pays Short Pays Chart Review Requests Chart Review Requests The Revenue Cycle Production Line Raw Materials Production Process Finished Products Quality Control

Lean Process Transformation Good Change Kaizen Continuous Improvement Toyota Production System - TPS Taiichi Ohno 1.Produce only what the market wants 2.Use visual aids to highlight where action is needed 3.Use small batch sizes

Lean Process Problem Solving Dr. W. Edwards Deming PDCA PDSA

Don’t let perfect get in the way of better One improvement often leads to another

Standardized Work Source: lean.org

Standardized Denial Processing

TIMEDOWN Eliminating Waste – Muda Employee Underutilization Underutilizing staff talents, skills & knowledge Defects Effort caused by omissions and incorrect information. Over-processing More work or higher quality than is required.  Waiting Wasted time waiting for the next step in a process Transportation Unnecessary movements of documents and files. Inventory Excess denials, zero pays & short pays not processed. Motion Unnecessary movement by people (e.g. walking). Non-Value Added Processing Processes that do not add value.

Defects

Over-processing

Waiting

Non-Value Added Processing

Motion

Employee Underutilization

Inventory

Root Cause Analysis The Underlying Causes “The Root” Below the Surface Not Obvious The word root, in root cause analysis, refers to the underlying causes not the one cause. No Authorization Billing Issues Coding Coordination of Benefits Cost Outliers Duplicate Claims Eligibility Issues Information Required from the Patient Information Required from the Provider Non-Covered Services Untimely Filing

Root Cause Analysis

Fishbone Diagram PeopleProcess/Policy EquipmentEnvironment Inadequate staffing in patient access Lack of coordination with registration Computer downtimeOvercrowding Inadequate training Poor role definition

Denial Value Stream Value Stream

Value Stream Mapping Process

Value Stream Mapping Kit

Review Assign Review Correct Resubmit Gather Documents Gather Documents Write Appeal Write Appeal Submit to Payer Submit to Payer Adjust or Bill Patient Adjust or Bill Patient 835 Denial 835 Denial Appeal Reopen? No Yes.5 Hr 1 Min/Avg.5 Min/Avg5 Min/Avg 2 Min/Avg 10 Min/Avg 1 Min/Avg 10 Min/Avg 15 Min/Avg 5 Min/Avg2 Min/Avg 2 days 4 days 2 days 1 days 5 days 8 days 2 Weeks 4 days 2 days Valid? Yes No

Denied Claims Review Denials Assign Denials Assigned Denial Queue Review Denials Write-off or bill patient queue Write-off or rebill Correct and Rebill queue Correct and rebill Assign to appeal queue Gather Information Write Appeal Send appeal Await payer response

Kanban

Visualize, optimize and manage workflow Enable real-time team collaboration Make Process Policies Explicit Kanban Board

Core Practices for Successful Kanban Adoption Shallow Manage Flow Make Process Policies Explicit Improve through Collaboration Visualize Workflow

Kanban is based on 3 principles

Manage Work in Process

Start by Modeling Your Existing Process Denials Board Appeals Board Audit Board

Workload Assignment & Management

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Home

Home2

home3

payers

aetna

provider

facility

carc

rarc

user

Tableview

Denial_Queue Appeal – properly coded cerumen removal and modified E/M coding

Denial_queue2

appeal_queue

Questions