Keith Olenik on Denials Challenges

Keith Olenik on Denials Challenges blog post

This article was originally published by and for HFMA.

Question: Our organization does not have a coordinated process to manage and prevent denials. With new regulatory demands and the steady increase in denials and audits, we’re experiencing new staffing needs. What strategies can we implement to reduce denials and the detrimental impact on our revenue cycle?

Answer: Audits and denials impact many areas. This can include revenue cycle, compliance, patient financial services, patient access, health information management (HIM), clinical documentation improvement (CDI) and physicians.

Managing denials calls for a coordinated effort among all parties involved in responding to denials. This is especially true for those responsible for documentation of medical necessity. Successful denial management and prevention strategies require the right mix of people capable of handling the process from beginning to end.

Before creating strategies to promote revenue integrity, healthcare organizations should know the core audit and denials challenges they face.

Denials Challenges

Denials process decentralization—when various areas within the organization receive denials and handle their own billing and coding—is a serious problem. Worse, it’s common in healthcare organizations today. Because decentralization is a core problem, there is a focus on the following related challenges:

  • Non-HIM staff lack the education and qualifications to understand denials and how to respond.
  • Ongoing changes to payer rules and regulations require education and training. Payers regularly update coverage decisions based on their patient populations.
  • New payment methods change the denial management process and documentation requirements.
  • New staffing needs arise along with the volume of audits. Flexibility is needed to handle the influx of audit requests.
  • Release-of-information staff must understand expectations and guidelines related to protected health information.

Furthermore, audits can involve thousands of patient records on a quarterly basis, requiring prompt response to each request, along with submitting documentation and ensuring staff availability upon receipt of the results. These burdensome tasks extend well beyond the daily responsibilities of HIM.

As healthcare organizations understand what issues they’re dealing with on a regular basis, they can implement strategies to decrease and prevent both audits and denials.

Promote Denial Management and Revenue Integrity

As organizations make the shift to value-based payment, the following eight strategies will help create a coordinated process. These steps can manage and prevent healthcare denials, as well as help promote denial management and revenue integrity:

  1. Centralize the management of audits and denials under HIM to ensure consistent and timely responses.
  2. Implement a rigorous tracking system to collect data and manage audits and denials.
  3. Educate coding staff on the skills and competencies needed to manage the audit and denial process.
  4. Establish a multidisciplinary team to participate in the response to audits and denials that require specific expertise beyond HIM.
  5. Provide education regarding the payer stipulations that require preparation in advance of any audit request.
  6. Develop solutions to issues that have been identified based on patterns of denials.
  7. Document policies and procedures on the entire audit and denials process.
  8. Consider partnering with a vendor that offers coding expertise. Doing so can supplement staff and streamline coding and billing workflows throughout the revenue cycle.

By taking these steps, you’ll promote revenue integrity throughout your healthcare organization.