Denials Management

Objectives To understand the types of denials. Describe the Appeal Process. Learn Denial Prevention strategies. Differentiate between the different types of regulatory denial processes.

What is a Denial?? A Denial is an adverse payment determination issued by the Peer Review Organization (PRO) or a Managed Care Organization.

Types of Denials Precertification/Elective Surgery Admission Continued Stay Retrospective Administrative/Technical Medical Necessity

Types of Denials Medical Necessity When patient does not meet inpatient criteria Example: Patient remains in the acute care setting for services that can be safely provided at a lower level of care. Administrative/Technical Any denial that results from not adhering to the payers contract provisions Example: No notification to the payer when the member gets admitted.

Types of Denials (Cont’d) Precertification /Elective Surgery Request for an authorization and/or approval was made prior to the date of service and denied. Admission Request for an authorization and/or approval was made at the time the patient presented for treatment, and was denied.

Types of Denials (Cont’d) Continued Stay days DURING the inpatient stay that are not authorized and/or not approved by the payer. Retrospective a payer denial for an authorization of inpatient days AFTER the patient has been discharged.

Notice of Financial Responsibility (NOFR) A denial letter is issued to the beneficiary and/or representative if the hospital has received notification from the Managed Care Organization that they will not authorize and/or approve the hospital services being provided. Liability begins the next day after issuance of the NOFR.

The Denial Process Case Managers will be given notice of an denial in the following ways: Concurrently Upon discharge Retrospectively Denial notices are given verbally by the on-site Managed Care Reviewer, via the phone, fax or by letter from the managed care company.

Strategies to Reduce Denials Targeted Physician Education Clear communication with Payers Complete medical necessity reviews Utilize your Physician Advisor (PA)

What is an Appeal? A mechanism by which the hospital can request a reconsideration of a denied day and/or claim.

The Appeal Process (Insert your facility’s appeal process)

Regulatory Agency Retrospective Review Process Hospital Payment Monitoring Process (HPMP) Program for Evaluating Payment Patterns Electronic Report (PEPPER) Recovery Audit Contractor

HPMP Hospital Payment Monitoring Program The purpose of HPMP is to measure, monitor, and reduce the incidence of improper fee for service inpatient payments, including errors in DRG coding provision of necessary services. This monitoring program is for Medicare only.

HPMP Reporting Requirements All hospitals are asked to review 30 charts per quarter. Reviews can be performed concurrently or retrospectively. If an error is identified after payment has been received, it is expected that the claim be rebilled.

HPMP Reporting Requirements (Cont’d) The data results are reported utilizing the HPMP Quarterly Report form. All reports are due on the last working day of the reported month. Reports are faxed to your QIO.

PEPPER (Program for Evaluating Patterns Electronic Report) Designed to help hospitals review statistics on their Medicare discharge data. The basic focus is on statistical outliers.

PEPPER The information is reported quarterly to the designated QIO. By using these reports, the hospitals can more effectively address billing or payments concerns with physicians. Hospitals are able to review & identify actual data. Action Plans are formulated that may need further review.

Recovery Audit Contractor (RAC) Tax Relief and HealthCare Act of 2006 Signed into law by President Bush in December Requires CMS to use RAC nationally no later than January 1, 2010.

Recovery Audit Contractor (RAC) An effort by the Centers for Medicare and Medicaid Services (CMS) to pay claims accurately and to give clear guidance on Medicare billing and payment policies. The RAC requests medical records, reviews claims, and requests repayment for claims paid inaccurately.

Recovery Audit Contractor (RAC) (Cont’d) The medical records are chosen by RAC. Started as a 3 year pilot project in Three states are mandated to perform this project (Florida, New York, California).

References Texas Medical Foundation for Centers for Medicare and Medicaid Services FMQAI Section 1154 of the Social Security Act CFR S HPMP fulfill the CMS Requirement to comply with the Improper Payment Information Act of 2002 (Public Law # ( ).

References (Cont’d) CMS (Centers for Medicare and Medicaid Services) CMSA Core Curriculum for Case Management, Lippincott Appealing and Preventing Denials Claims – HCMarketplace.com BayCare Denial Database Training Manual.

Review Questions 1.What is a denial? 2.Types of denials include: a)Administrative b)Medical necessity c)Retrospective d)All of the above 3.True or False: Denials can only be given concurrently?

Answer Key 1.A Denial is an adverse payment determination issued by the Peer Review Organization (PRO) or a Managed Care Organization. 2.D 3.False