5 Denials Management Tips for ICD-10 and Beyond

Guest post by Crystal Ewing, senior business analyst and manager of regulatory strategy, ZirMed.

Crystal Ewing
Crystal Ewing

Denial management is an industry-wide challenge—and despite traditional approaches intended to reduce denial rates, it’s one that continues to grow. Frankly, this is absurd.

I say that because, despite the recent announcements from CMS regarding changes to how they will process ICD-10-coded claims for the first year, denials will likely still increase under ICD-10—and that’s something healthcare providers don’t need to suffer in full, because it is possible to reduce their denial rates before ICD-10. Ultimately this will be more impactful than any denial management program specifically targeting ICD-10-related denials, because the “everyday” denials will otherwise endure and continue to delay A/R long after whatever disruption ICD-10 causes has long faded into distant memory.

Here are two simple truths:

So where does this leave healthcare organizations seeking to decrease denials ahead of ICD-10, a change that—despite recent announcements from CMS—is nonetheless likely to bring with it a spike in denials?

Exactly where they’ve always been—in need of straightforward best practices that actually help them drive down everyday denials that create A/R delays, back-office backlogs, and an unreliable revenue cycle.

Step 1: Thoughtful Automation

Let’s step through a common process for working denials, just to clarify why it’s such a headache.

Here are some time-study figures—per each denial, staff spend:

That is unacceptable—which is an opinion. But it’s also unnecessary, and that’s a fact. Each of the time-consuming manual processes mentioned above can be eliminated or significantly reduced through thoughtful automation and workflow-focused software development.

Reducing research time and enabling staff to easily resubmit denied claims are two of the biggest denial management time-savers—period.

Step 2: Improve visibility into performance and focus on reducing bad debt

To gain visibility into the performance of the staff work denials, you have to break down the walls between systems and processes—because otherwise it’s impossible to know how much time something “should” take or even how long staff are spending on individual parts of their workflow. Once you gain this deeper visibility, you can measure and motivate individual success by showing clear examples of what it looks like in practice. This will also allow management to strengthen their control of bad debt—they can set clear thresholds for when working a denial is “worth it,” and when the investment of time and energy exceeds the benefit of working the denial at all.

Step 3: Triage denials

To effectively manage denials, you must focus your efforts on the denials that a) have the highest likelihood of being appealed successfully and b) have the greatest impact on your organizational performance. Then, as you gain insight into payer-specific denial trends and outcomes, you can tailor your approach by payer and even segment the workflow to specific staff if workload for individual payers is sufficiently high to support that decision.

If you put this process in place, you can simply recreate it and boom—you have the “model” you will follow to manage the transition to ICD-10 and all other as-yet-unknown future claims-related disruptions created by industry mandates.

Step 4: Prioritize understanding the root causes of denials—long-term, this will matter far more than ICD-10

To make sustainable improvements to your denial rate, you have to uncover, understand, and make decisions based on root causes—otherwise you’re just chasing dozens or even hundreds of iterations that in point of fact are all the same problem. There are three key questions to keep at the forefront of your mind when analyzing denials:

Step 5: Accelerate the pace of collections—holistically

Providers need a consolidated view of denial history activity and to follow the full story of what happens at each step—because this is the only way to see where the real bottlenecks are. The answers might surprise you, and above all you might discover they aren’t consistent across all claim types or payers.

You might also find, if you benchmark ahead of ICD-10 and continue to measure as you go, that the greatest drivers of your denials and denials backlog following go-live will be the same as they are today—unless you take steps now to begin addressing them.

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