By Glenn Krauss, Director of Enterprise Solutions, ZirMed
Twitter: @zirmed
Strategies to Improve Denial Management
When: Wednesday, November 16th, 1pm ET
Register for this event.
By training and temperament, physicians tend to do whatever it takes to help those who need it. That attitude is admirable overall – after all, you wouldn’t want to go to a doctor who didn’t have your best health interests at heart.
For hospitals and health systems, however, this way of thinking does present a dilemma. Today more than ever, government and commercial health payers are taking a closer look at hospital admissions, treatments, and care plans to determine if they meet the definition of “medical necessity.”
According to the Centers for Medicare and Medicaid Services (CMS), medically necessary is defined as “healthcare services or supplies needed to prevent, diagnose, or treat an illness, injury, condition, disease, or its symptoms and that meet accepted standards of medicine.” Specifically, under 1862 (a) (1)(a) of the Social Security Act, medical necessity is defined as reasonable and necessary care for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member. Sounds straightforward, doesn’t it?
Yet the reality is this is a very broad definition that is subject to interpretation. Providers, physicians, payers, courts, and consumers all maintain their own ideas about what constitutes medical necessity.
For example, a patient who is experiencing severe hip pain may consider hospitalization as a necessary step, warranted with his/her first-hand experience with the degree of pain. A physician who is empathetic might even agree given the clinical severity of the condition and its direct impact on the patient.
But if all the documentation amounts to is “patient presented with severe pain in her right hip” without further qualification and explicit description of the patient’s true clinical story including an accurate account and reflection of patient acuity, CMS or a commercial payer will undoubtedly deny the hospital admission as not being medically necessary. Without sufficient detail, it will be difficult to successfully appeal the denial and recoup the revenue earned for services rendered.
This is one of the reasons many hospitals list clinical documentation improvement (CDI) as a top priority. They trust the judgment of their physicians, but also recognize that an investment in CDI will not only help improve quality; it will also increase reimbursement. Both of which will help them achieve a more orderly, efficient, and effective transition to value-based care.
Statistically, 90% of all denials are preventable. With that in mind, here are five ways to reduce and manage medical necessity denials:
1. Get to the heart of clinical documentation issues.
It’s important for physicians to understand and appreciate what the standards for medical necessity are, as well as the type and extent of documentation required to ensure an outside reviewer confirms their clinical judgment and medical decision-making. The care provided must align with and be supportive of the documentation of the condition, which in turn must align with established clinical best practices.
There’s more to it than just the services themselves, however. A medical necessity denial may also be produced if the services could have been performed at an alternative level (lesser treatment or workup, observation instead of inpatient, etc.). Training physicians on the core tenets of what constitutes medical necessity from a clinical perspective – and the appropriate documentation of critical thinking required to avoid problems around it – will be of tremendous benefit. As will sharing with them best-practice strategies and techniques to record their observations, thought processes, problem solving skills and analytical abilities, as that will help prevent issues downstream. Technology that alerts physicians to situations where there are potential medical-necessity-related issues so they can improve and enhance documentation and the recording of the decision-making process can preempt many problems – including all the work required for appeals – later.
2. Confirm eligibility – and automate alerts for pre-authorization requirements.
The time to check for eligibility, especially for costly services, is before they are rendered. Patients covered under Medicare Part A, for example, must meet the requirements for the Two Midnight Rule in order to have a hospital stay covered. Here again, physicians must understand what is required to meet the criteria for an inpatient stay, and must fully document the circumstances that led to the need for the admission and continued stay. While neither is an assurance of payment, more effective documentation of care that explains the clinical rationale for admission, paints an accurate picture of clinical acuity, and clearly meets requirements for establishment of medical necessity lessens the chance of a denial.
The same goes for pre-authorizations. Hospitals should not count on their patients knowing whether a particular treatment or procedure requires pre-authorization – nor should they fully rely on their physicians to pose the question. Automated alerts in the computerized physician order entry (CPOE), electronic health records (EHR) system or scheduling system/department—tied to treatments or procedures that require it from that particular payer—will help avoid denials later.
3. Pinpoint the most common and highest-value medical necessity denials.
This is an area where analytics can play a significant role. When starting a CDI or denials-avoidance program, hospitals should run analytics to determine where these efforts will have the greatest impact, i.e., the most common medical-necessity denials as well as those that are costliest. The answers will pinpoint where the greatest value can be gained. Once denial-management programs are underway, the analytics should be run monthly to track if improvement efforts are having the desired effect and to uncover new potential areas to target.
4. Triage and train based on the real impact, not just hypothetical targets.
This is another area where analytics can make a huge difference. Rather than training generally across a broad swath of possibilities, focus on specific areas with real opportunity for net improvement and return on investment, and show how more robust documentation reducing medical necessity denials can have an impact on care quality and reimbursement. Demonstrate instances where simple changes could have prevented unnecessary self-inflicted denials or unnecessary rework, and use hard numbers to quantify the cost over time. Many physicians, especially hospitalists, are simply unaware of the financial ramifications certain decisions or a lack of detail create. The more you can demonstrate how reducing medical necessity denials impacts them and their department, the more receptive they’re likely to be to making changes.
5. Automate the identification and routing of denials – to the right person at the right time.
Every payer has their own distinct rules and requirements. As you gain valuable insight into payer-specific denial trends and outcomes, you can tailor your approach by payer and even segment the workflow to specific staff where it makes sense. For example, general denials for Payer A may go to one person, while the more complex medical necessity denials route to someone on that team with deeper clinical expertise and core competencies. Or the hospital may have case-management or utilization-review teams with deep clinical experience who work on all medical necessity denials regardless of payer. It’s all about routing the right denial to the right person or team at the right time. The more this process can be automated, the faster the organization can react and the sooner appeals can be filed and reimbursement potentially realized.
Medical necessity denials are complex and time-consuming, especially given there is no single set of rules and best practices to avoid them. But with a dedication to CDI that includes training and education, along with the use of analytics to identify the greatest trouble areas, hospitals and health systems can reduce the frequency of occurrence, minimize the negative impact, and alleviate unnecessary costs associated with medical-necessity denials.
Interested in learning more? Register here for our webinar on 11/16: Strategies to Improve Denial Management.
This article was originally published on ZirMed and is republished here with permission.