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Presents Establishing a Lean Quality Approach to Denial and Appeal Management.

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Presentation on theme: "Presents Establishing a Lean Quality Approach to Denial and Appeal Management."— Presentation transcript:

1 presents Establishing a Lean Quality Approach to Denial and Appeal Management

2 Is the glass half empty… …or half full?

3 The Staggering Cost of Denials An additional 6% of gross revenue is lost to underpayments. 2 Nearly 13% of annual provider revenue is at risk to payer denials nationwide. 2 High denial rates impact both the speed at which you get reimbursed and the administrative costs associated with being reimbursed. It is estimated that the cost of claims rework is as high as 20% of overall revenue cycle operating costs. 1 1. Steven Huddleston, “Creating a Healthy, Unified Revenue Cycle” HFMA Revenue Cycle Strategist, November, 2012 2. “Keys to Effective Denial Management” Emdeon Compass, March, 2010

4 ICD-10 Implementation

5 Fable of the Lion & the Gazelle



8 Lean Process Improvement Henry Ford Production Line Efficiency — Flow

9 Measuring KPI’s Measuring KPI’s Timing Timing Sequencing Sequencing Inspection Inspection Supervision Supervision Rebills Rebills Adjustments Adjustments Appeals Appeals Identifying Identifying Analyzing Analyzing Qualifying Qualifying Denials Denials Zero Pays Zero Pays Short Pays Short Pays Chart Review Requests Chart Review Requests The Revenue Cycle Production Line Raw Materials Production Process Finished Products Quality Control

10 Lean Process Transformation Good Change Kaizen Continuous Improvement Toyota Production System - TPS Taiichi Ohno 1.Produce only what the market wants 2.Use visual aids to highlight where action is needed 3.Use small batch sizes

11 Lean Process Problem Solving Dr. W. Edwards Deming PDCA PDSA

12 Don’t let perfect get in the way of better One improvement often leads to another

13 Standardized Work Source:

14 Standardized Denial Processing

15 TIMEDOWN Eliminating Waste – Muda Employee Underutilization Underutilizing staff talents, skills & knowledge Defects Effort caused by omissions and incorrect information. Over-processing More work or higher quality than is required.  Waiting Wasted time waiting for the next step in a process Transportation Unnecessary movements of documents and files. Inventory Excess denials, zero pays & short pays not processed. Motion Unnecessary movement by people (e.g. walking). Non-Value Added Processing Processes that do not add value.

16 Defects

17 Over-processing

18 Waiting

19 Non-Value Added Processing

20 Motion


22 Employee Underutilization

23 Inventory

24 Root Cause Analysis The Underlying Causes “The Root” Below the Surface Not Obvious The word root, in root cause analysis, refers to the underlying causes not the one cause. No Authorization Billing Issues Coding Coordination of Benefits Cost Outliers Duplicate Claims Eligibility Issues Information Required from the Patient Information Required from the Provider Non-Covered Services Untimely Filing

25 Root Cause Analysis

26 Fishbone Diagram PeopleProcess/Policy EquipmentEnvironment Inadequate staffing in patient access Lack of coordination with registration Computer downtimeOvercrowding Inadequate training Poor role definition

27 Denial Value Stream Value Stream


29 Value Stream Mapping Process

30 Value Stream Mapping Kit


32 Review Assign Review Correct Resubmit Gather Documents Gather Documents Write Appeal Write Appeal Submit to Payer Submit to Payer Adjust or Bill Patient Adjust or Bill Patient 835 Denial 835 Denial Appeal Reopen? No Yes.5 Hr 1 Min/Avg.5 Min/Avg5 Min/Avg 2 Min/Avg 10 Min/Avg 1 Min/Avg 10 Min/Avg 15 Min/Avg 5 Min/Avg2 Min/Avg 2 days 4 days 2 days 1 days 5 days 8 days 2 Weeks 4 days 2 days Valid? Yes No

33 Denied Claims Review Denials Assign Denials Assigned Denial Queue Review Denials Write-off or bill patient queue Write-off or rebill Correct and Rebill queue Correct and rebill Assign to appeal queue Gather Information Write Appeal Send appeal Await payer response

34 Kanban

35 Visualize, optimize and manage workflow Enable real-time team collaboration Make Process Policies Explicit Kanban Board

36 Core Practices for Successful Kanban Adoption Shallow Manage Flow Make Process Policies Explicit Improve through Collaboration Visualize Workflow

37 Kanban is based on 3 principles

38 Manage Work in Process

39 Start by Modeling Your Existing Process Denials Board Appeals Board Audit Board

40 Workload Assignment & Management


42 login ctrownson ▪▪▪▪▪▪▪▪▪▪

43 Home

44 Home2

45 home3

46 payers

47 aetna

48 provider

49 facility

50 carc

51 rarc

52 user

53 Tableview

54 Denial_Queue Appeal – properly coded cerumen removal and modified E/M coding

55 Denial_queue2

56 appeal_queue


58 Questions

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