Denial Management

The AMA reports that up to 5% of claims are denied, and that number is only expected to rise (perhaps by as much as 200%) with the initial implementation of ICD-10 later this year. Medical billing and coding, which is undergoing enormous changes with the implementation of ICD-10, is always an area where additional training for staff can be a positive investment in denial management. Providing continuing education for coders can help them be better prepared to identify potentially problematic documentation, and be able to code with the highest level of accuracy.

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It’s often been said that the best defense against denials is — frankly — avoiding denials, but if that’s proving uneasy, if it seems to be near-impossible, the next best defense is to do a root cause analysis so that you understand why the denials continue.

Sometimes, the answer is obvious: it could have been a coding error, a duplicate claim or a clerical error. Other times, the reason is far more complex: the physician’s medical decision making is being brought into question, the admission status of the patient is up for debate or the services being billed for are suspect for fraud.

What is Root Cause Analysis?

In many industries other than healthcare, RCA is used to help identify problem areas that, if corrected, can provide better outcomes for all involved. In the healthcare sphere, that would pertain to administrators, doctors and patients.

The first step is to define the problem, which in this case, is claim denials. Ask yourself why the claims are denied; what are the symptoms and signs of denials within your organization?

You can figure this out by looking at the facts and figures, your proof that a problem exists. This is how you’ll convince people within the organization that things need to change. You also need to be able to establish a timeline of how long the problem has existed and the extent to which the problem has ramifications throughout the organization.

After that piece is complete you can begin to assemble and interpret the sequence of events that lead to the problem (again, denials in this case). What series of actions (or lack of action) contributed, what pre-existing conditions within your organizations allowed it to proliferate and were there other concurrent problems that encouraged the problems? (Such as issues around your EMR or coding procedures).

Once you’ve amassed all this data you can start thinking about the “root cause” — what causal factor is responsible for these ongoing issues with claim denials; what’s the real reason, when you drill down deep, that they happen?

Once you’ve isolated it, it’s time to make recommendations and implementations for change. Is there a solution to the problem? Is it a preventable problem? Who within your organization will be responsible for this implementation and on-going analysis of its efficacy?

A Denial Management Solution

When making changes that require a lofty financial investment, you need to make sure you also predict the effects of the solution presented and be honest about the ways in which it could fail. No solution is perfect for every hospital, or for every problem, so a certain degree of flexibility should be maintained.

Sometimes, the best way to solve a problem is just to be willing to think differently!