1. Denials Management
Prevention and Best Practices

2. Denials Measurement Definitions Data Reporting
Management and Prevention
Denial Capture
Denial Appeals
Workflow Management

3. Measuring Denials

4. Denial Rates
Dependent on accurate capture of denial adjustments and well designed denial code structure
Benchmark Total Net Denial Rate ≤ 2%
≤ 1% Net Technical Denial Rate
≤ 1% Clinical Denial Rate
Utilize payer, service line, and physician level groupings to identify targeted areas of opportunity
Gaurav and then Srarh

5. Reporting & BI Application
Connect the Data
Reporting & BI Application
Revenue Cycle Workflows
Contract Management
EDI Data
(835/837,etc.)
Linkage of previously disparate data promotes root cause analysis & action plan development
Integration of data into a single reporting system will drive workflow processes and provide consolidated reporting

6. Ex: Gross Denials
Sarah

7. Compare across payers to analyze how payer behavior compares to peers
Ex: Gross Denial Rate
Payer 1
Payer 2
Payer 3
Payer 4
Payer 5
Compare across payers to analyze how payer behavior compares to peers
Payer 4 Denial Rate for Patient Info = 6.12%, compares to <2% for other payers
Sarah

8. Ex: Net Denial Write Offs
Sarah

9. Ex: Net Denial Rate
Sarah

10. Leakage: Payment Variance to Expected
Leakage = Expected Reimbursement – Total Payments to Date
If your Contract Management system does not generate a valid expected reimbursement amount, use the Cash Factor
Cash factors at payer and service line levels should be calculated using accounts that have had a period of time to liquidate
Important Restrictions:
Evaluate 0 Balance Accounts
Use a lag period (At east 90 Days) to allow accounts to resolve
Cash factor = payment to gross charge ratio. But you want to be as specific as possible – and find the cash factor not only at the payer level and service line level.

11. Measure 1: Leakage Rate
Leakage rate hits a high of over 5.5% for Commercial and Medicaid HMO Financial Clusters
Payer-specific comparison of leakage rates shows revenue lost and targets areas of focus

12. Speed to Cash as % of Expected
X Days – Broken out into 30 Day Increments out to 180, 180 to 270, 270 to 360 and 360+
Measures both Revenue Cycle Goals – Totality and Speed
Answer the age old question “Why/Where is cash up/down/flat?”
Relies on good Net Revenue and Expected Reimbursement data
Total % for sufficiently aged periods are leakage to expected
Leakage goal best practices
Medicare/Medicaid – 99%
Commercial Payers – 95%
Variance to Target Leakage x Annual Expected for payer = P+L Opportunity
Trends are key. Performance changes will appear quickly in this analysis. Creating this report for specific payers, services is key.
Sarah

13. 0 – 30 Day increment is driven by DNFB reduction
Ex: Speed to Cash as % of Expected Reimbursement
Improvement in the
0 – 30 Day increment is driven by DNFB reduction
Sarah

14. Ex: Speed to Cash as % of Expected Reimbursement
Improvement in the Day increment is driven by more efficient follow-up practices
Sarah

15. Ex: Drill to Isolate Specific Payer/Services
Sarah

16. Management and Prevention

17. Capturing and Routing Clinical Denials
Faxes/mailed denial letters
Case management system for Daily Reviews/Concurrent Processes
Parses raw 835 files, identifies denials CARC codes
Mine PAS data for denials identified via Patient Accounting Follow-up
Review denial letters
Capture output file from case management system
Merges discrete data sources to identify all denials that have been either upheld completely, partially upheld, or not worked during peer-to-peer.
Flagged for review by denial rep
Denial rep confirms denial day/service with payer, validates appeal timeframe & $, and assigns case to clinician
Clinician reviews case, generates appeal letter or closes if no clinical merits
Denial rep packages appeal letter and medical record, submits to Payer
Denial rep commences follow up activity, noting receipt date of appeal
Appeal overturned, posts cash, Denial rep validates and notes in system
Appeal partially overturned, posts cash, Denial rep validates and notes in system, refer back to clinician for Level II or III Appeal
Appeal upheld, Denial rep validates and notes in system, refer back to clinician for Level II or III Appeal

18. Denials Management Services
AGGRESSIVELY APPEAL MANAGED CARE DENIALS
Retrospective Appeals
Logical structure
Sense of clarity
Level of clinical proficiency
External appeal option
External appeal process should be pursued for clinically worthy cases
Know your legislative and payer requirements
Legal Remedies
Challenges based on contractual issues
Challenges based on ERISA and other regulatory issues
A High overturn rate with a low appeal rate is no good
Payers know who is asleep at the wheel and who fights back

19. Strategic Workflow Prioritization and Routing
Utilize the ERA information to drive workflow to front line staff at the highest priority
Further refine the payer responses to identify the type of work required:
Classify your CARC/RARCs into denial types that can feed into workflow
Compare remaining balance to Patient Liability Amount to isolate accounts requiring balance transfers (AR at Net)
Compare payment amount to Expected Reimbursement to find remaining expected reimbursement (AR at Gross)
Prioritize work by remaining expected reimbursement (high to low)
Denial Resolution Action Required
Actionable CARC/RARC on ERA
$0 Payment Transaction
Payment Posted ≠ Expected Amount
Requires Balance Adjustment/Transfer
Payment Posted but Balance ≠ 0
Balance = Patient Liability

20. Workflow Productivity
Productivity should be just as important in revenue steering committee meetings as other KPIs
Break down your productivity to show productivity on denied accounts to make sure that denial inflow is appropriately covered and prioritized
Average total weekly productivity is approx. 2,400 accounts
Average weekly touches to denied accounts is approx. 650
Average total weekly productivity is approx. 2,400 accounts

21. Analysis of Work Performed
Review specific user activity to analyze actions applied on denied accounts
Assess correlation between denial leakage rates and how accounts are worked on the back end
Drill further to see actions by specific employee
Assess correlation between denial leakage rates and denial resolution on accounts during A/R follow-up
Pinpoint exactly where to focus additional training or QA efforts!

22. Analysis of Work Performed
Drill into specific user activity to analyze actions applied on denied accounts
Assess correlation between denial leakage rates and how accounts are worked on the back end
Drill further to see actions by specific employee
Drill further to see actions by specific employee
Assess correlation between denial leakage rates and denial resolution on accounts during A/R follow-up
Pinpoint exactly where to focus additional training or QA efforts!
Pinpoint exactly where to focus additional training or QA efforts!

23. Key Measures to Focus Your Revenue Cycle
Reporting & Dashboard BI Application
Workflow
Contract Management
835 Remittances
Net Payments to Expected Ratio
Leakage Rate
Speed to Cash as
% of Expected Reimbursement
Gross Denial Rate
Leverage ERA data to drive workflow processes
Analyze actions applied to denied accounts
Prioritize workflow using Remaining Expected Reimbursement
Net Denial Rate