Q: Much to our surprise, the transition to ICD-10 continues to go relatively smoothly. Our organization has had minimal denials and delays in cash flow. Is our experience unique, or is this what you’ve seen nationwide as well? When do you predict denials will start to hit providers? And how can we use the time between now and then to devise a bullet-proof denial management strategy?
A: Based on our experience at HRS, many organizations have yet to see any significant increase in denials post-ICD-10 go-live. In fact, it has been shockingly quiet even despite the fact that the industry is now six months into the transition. Many of us suspected that we’d start to see denials in early 2016. When that didn’t happen, we assumed they would begin at the end of the first quarter. Now we’re leaning toward fourth quarter 2016 or even early 2017.
One suspicion is that payers are using this time to perform data analytics to spot trends and vulnerabilities-particularly with unspecified codes. Once they’re able to glean this data, they can devote auditing resources accordingly.
Likewise, providers should use this time to formulate denial management strategies. Include HIM professionals in these conversations. HIM has an intimate knowledge of documentation and coding compliance. In many ways, HIM can build the foundation for proactive denial mitigation and help identify opportunities for improvement.
Let HIM professionals lead the charge using these four strategies:
1. Renew your focus on concurrent clinical documentation improvement (CDI)
What are the at-risk claims in your organization, and how can you work concurrently to protect them from denials? For many organizations, the denials they have received have been based on a lack of clinical documentation to support the assigned secondary diagnoses.
Consider encephalopathy, a major complication/comorbidity (MCC). Has the physician documented all treatment, including neurology checks and consultations? Has he or she documented ‘dementia’ or ‘delusions’ rather than ‘oriented times three?’ Payers and third-party auditors want to see evidence of why this condition meets the criteria of a reportable secondary diagnosis.
Acute renal failure is another example. Documentation of ‘abnormal creatinine’ is insufficient. Payers want to see ‘urine output down,’ or ‘no urine output.’
If coders aren’t comfortable questioning physicians directly about their documentation, develop a strategy whereby a physician advisor serves as an intermediary. The goal is to prevent these clinically-based denials on the front-end as much as possible.
2. Inventory denials as they occur
Many organizations don’t have a good process in place for tracking and trending denials. That’s primarily because denial codes (i.e., Claim Adjustment Reason Codes [CARC] and Remittance Advice Remark Codes [RARC]) aren’t always presented in a way that’s easy to interpret or sort. To complicate matters, the descriptions for these codes are often vague and non-specific. A manual process is necessary to review the record, pinpoint the specific reason for denial, and then insert this information into a tracking tool that can be used for analysis.
Take the time to develop a drill-down/tracking tool either in-house or in collaboration with your EMR vendor. Also consider soliciting input from your external coding vendor that can provide insight into specific vulnerabilities that they have identified in their coding efforts. Even a rudimentary tracking tool is helpful. Start with high-risk or high-dollar DRGs or diagnoses for each specialty. Track each denial code as well as the specific reason for denial, and pay close attention to new elements for ICD-10 (e.g., laterality, specificity, etc.). Once you’ve established that the method is a financially sound investment of time and resources, expand upon your data collection.
3. Create a targeted education strategy
As you identify trends in denials, be sure to share this information not only with the entire revenue cycle team but also with CDI, your external coding vendor, and chiefs of all clinical departments.
Segregate your data by service line and by specific provider. Even if you don’t share provider-specific data during general departmental meetings, be sure to have this drill down information available when meeting with providers one-on-one.
4. Don’t forget about retrospective auditors
External auditors, such as RACs and MACs, are allowed to look back at claims for the past three years. This means that auditors may still be examining claims from 2014 and 2015. It could be another year before we see the true impact of retrospective audits of ICD-10 claims. However, once these audits begin, providers must be prepared. Consider the following tips:
• Identify a point person/contact for all RAC and other external auditor correspondence.
• Review the timeline requirements for each auditor.
• Refine processes for tracking correspondence and follow-up.
• Identify a physician who can assist with level two and level three appeals.
• Incorporate these retrospective audits into your denial management tracking tool. As with other types of denials, a manual process is necessary to extract specific reasons for denials and input this information into the tool. The good news is that retrospective denial letters tend to be fairly detailed in terms of the reason for denial. The bad news is that it can be cumbersome to whittle these letters down into succinct version that providers can manipulate, analyze and use for process improvement purposes.
The time to act is now
If our suspicions hold true, organizations may have several months to prepare for what could be a colossal wave of denials. Don’t rest on your laurels and assume that your revenue is protected indefinitely. Once the potential surge of denials hits, it may be difficult to recover. Take steps now to ensure that you can stay afloat.
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Photo courtesy of: Medical Coding News
Originally Published On: Advanced Health Network
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