1. Using Data to Reduce Denials Presented to AAHAM MD January 17 2014 Practical, Innovative, Medical Management Solutions

2. Changing Denials Landscape  The nature of denials has changed dramatically in the last 5 years  Unsustainable Medical cost increases  More denials From Government programs  Fewer overturns  Increasing cost to appeal 2

3. Likely Impact of The ACA  Increases in Medicaid eligibility to all individuals with income below 138% of FPL  New enrollees likely to access more care, which may initially result in more denials.  However hospitals will now get paid for portions of what used to be charity care.  Overall earnings impact for hospitals unpredictable. 3

4. Impact of RAC on Denials  The RAC programs saved CMS 488 Million Dollars net in 2011.  With this success we have seen expansion of additional programs by CMS.  Commercial carriers may take the same retrospective approach.  End result will likely be more denials 4

5. Bottom line  Increasing denials will impact net revenue  Appealing denials no longer enough  Hospitals must develop additional strategies to reduce denials  In the form of Root Cause denials Analysis Empowering physicians reduce denials 5

6. Use data to reduce denials  Provide credible, statistically sound data  Identify root cause of denials  Obtain physician leadership Buy in  Engage physicians in groups  Work with physicians to produce solutions. 6

7. Data Sources  There are numerous different sources of data in the hospital setting  We recommend using denials data for the following reasons It is timely and addresses the issue at hand Immediately available and easy to collect A steady flow of data enables frequent re- measurements It is credible and reliable 7

8. Type of Data:  Both administrative and clinical Data 8

9. Data Analysis We focus our data collection with two main goals in mind. Case Management Analysis  Actionable data that allows us to better understand the denials environment, efficiently allocate case management resources and optimally adjust our case management strategy to allow the greatest impact on denials reduction. Physician Drivers  Understand the physician controlled drivers of denials at a level that allows physician leaders to work closely with case management to implement sustainable changes that help reduce physician driven denials. 9

10. Case Management analysis  We look for trends & patterns that define the characteristics of the denial environment  Average number of days per denied admission. ADPDA  How does ADPDA change over time?  Denials by diagnosis.  What part of admission frequently denied? 10

11. ADPDA  The average number of denied days per denied admission (ADPDA) is an important number to track because it tells you several things about your denial environment. This number tells you how many days on average are being denied for every account you receive a denial on. If this number is higher than 2 then you probably have some medical management opportunity to reduce denials. Below is an example of trended ADPDA. 11

12. ADPDA  ADPDA is important because it can be impacted by Case Management  ADPDA trend can also be measured to evaluate progress of an intervention  You can look at ADPDA of a facility  You can also look at ADSPDA of a specific diagnosis 12

13. ADPDA Example QuarterDollars Days denie d Admissio ns denied Avg. Days/denial Or ADPDA Avg. cost/day denied Jan to Mar 2011 $ 716,580.015152671.9$ 1,391.42 Apr to Jun 2011 $ 705,049.204832232.2$ 1,459.73 Jul to Sep 2011 $ 811,179.845272532.1$ 1,539.24 Oct to Dec 2011 $ 722,161.014882541.9$ 1,479.84 Jan to Mar 2012 $ 1,239,381.317822643.0$ 1,584.89 Apr to Jun 2012 $ 1,155,123.436212502.5$ 1,860.10 Jul to Sep 2012 $ 1,025,693.446042432.5$ 1,698.17 Oct to Dec 2012 $ 766,750.973892111.8$ 1,971.08 Total 2011$ 2,954,970.0620139972.0$ 1,467.94 Total 2012$ 4,186,949.1523969682.5$ 1,747.47 percent change 42%19%-3%23%19% 13

14. ADPDA Example 14

15. ADPDA Example DIAGNOSISADPDA SYNCOPE AND COLLAPSE2.3 FRACTURE NOS-CLOSED2.4 EPISODIC MOOD DISORD2.9 DEPRESSIVE DISORDER3.4 CHF NOS4.6 FAILURE TO THRIVE-CHILD4.3 ABSCESS NOS3.7 MOOD DISORDER OTHER DIS3.3 DIZZINESS AND GIDDINESS3.0 15

16. ADPDA  For diagnosis with ADPDA greater than 3 we would consider additional CM Concurrent review and discharge planning resources.  In this example the following would be candidates. CHF Failure to thrive Abscess Depression and other mood disorders Dizziness 16

17. Denials by diagnosis Diagnosis with ADPDA less than 2 will benefit from sentinel ED case management 17 DIAGNOSISADPDA CHEST PAIN NOS1.4878 HEADACHE1.9048 ABDMNAL PAIN GENERALIZED1.8333 PAIN IN LIMB1.3889 FEVER1.7500

18. Denials by service 1.Identify physician drivers of denials 2.Develop physician driven interventions 3.Track progress through re- measurements 4. Identify and institutionalize successful interventions 18

19. Why Focusing on service 1.More success working with groups of physicians rather than individuals. 2.Individual physicians rarely drive meaningful volume. 3.When they do they are usually too important to mess with. 4.The competitive nature of physicians also works best in groups. 19

20. Example of service level data Service AdmitsTotal Days Denied Cardiology 86180 Infectious disease 51172 Cardiac Surgery 44164 Pediatrics 3070 Neurology 3062 General Surgery 1846 20

21. Service analysis 1.Select services with high denials 2.Examine diagnostic trends and LOS 3.Select individual records for review 4.Perform root cause analysis to identify denial drivers 5.Look for actionable solutions 21

22. Example 1 Infectious disease 1.We found many cases of pneumonia denied. 2.Most did not meet pneumonia severity index criteria for admission. 3.PSI is a clinical guideline accepted by physicians. 4.Recommended in service using PSI. 5.Follow up in 6 months to assess progress. 22

23. Example 2 Cardiac surgery 1.We found no particular diagnostic patterns. 2.We did find that many cases were denied in the middle of stay. 3.These were mostly ED admissions not elective cases 4.We found many of the denials were for delay in procedure. 5.Recommended closed CM interaction with Physicians. 6.Follow up in 6 months to assess progress. 23

24. Example 3 pediatrics 1.We found many denials for constipation. 2.We found many admissions for severe constipation denied 3.No outpatient therapy had been tried 4.Recommended pre-admit screen to ensure OP therapy failed 5.Follow up in 6 months to assess progress 24

25. Summary 1.High ADPDA helps focus concurrent review 2.Low ADPDA helps focus ED sentinel CM 3.Service analysis help identify specific areas of opportunity 4.Develop interventions 5.Re-measure 25

26. Thank You  We appreciate the Opportunity to present to all of you at the AAHAM Maryland Chapter today.  We realize that with the many changes in Heath care coming this year, Reducing and overturning Medical Necessity Denials is becoming an increasingly important source of revenue recovery.  If you have any questions please feel free to contact us for any reason. 26

27. Case Management Covenants, LLC Case Management Covenants is a Maryland based healthcare consulting services company specializing in denial management, and appeal management Consulting. Key Staff Contacts  President: Olakunle Olaniyan, M.D., MBA –practicing physician and former managed care VP and CMO O.olaniyan@cmcovenants.com  Director Of Client Relations: Brian C. Watt B.watt@cmcovenants.com  Chief Operations Officer: Dan Neall, MBA D.neall@cmcovenants.com Phone 410-715-4913 27