4 Steps to Building a Successful Denials Management Program
At Moffitt Cancer Center, a robust denial prevention program helped enable them to reduce denials from 14% of gross charges to 8% of gross charges billed. By implementing a similar program, your healthcare organization could see similar results.
For Moffitt Cancer Center, the process involved a multidisciplinary team, a data-driven strategy, a preventative approach, and a missional, patient-centric perspective that extended across the organization. Read on to learn more about how Moffitt Cancer Center jumpstarted and sustained its denial management program.
STEP 1: Create a Steering Committee
The first step to Moffitt Cancer Center’s success was the creation of a multidisciplinary steering committee. In creating your own committee, keep the following tips in mind:
Remember the Value of Executive Buy-In
Having an executive sponsor attend committee meetings demonstrates to the team that this initiative is a priority. Because you’ll want your committee to be multidisciplinary, recruiting both the Chief Financial Officer and a clinical executive such as the Chief Medical Officer is a good way to represent both financial and clinical interests and drive new processes forward across all critical areas of the organization.
Take a Multidisciplinary Approach
A key to a successful denial prevention strategy is a multi-disciplinary approach with leaders representing both the clinical and financial sides of the organization. Opportunities to prevent denials exist throughout many functional areas outside of finance. Coding needs to know, for example, the importance of staying on top of payer policies and ensuring that claims are submitted with appropriate documentation. Your steering committee should include representation from Patient Access, Utilization Review, Health Information Management, the Business Office, and clinical areas.
Our steering group has representation from revenue cycle, physicians, radiation oncology, and case management. – Joanna Weiss, VP of Revenue Cycle
Recruiting steering committee members might be challenging for some healthcare organizations, but it also might be easier than you anticipate as it was for Moffitt Cancer Center.
Here are some tips: Communicate the value of this initiative by stating your goal and the impact it will have on both the organization as a whole and for each individual team. Show how the effort ties to your mission and what it will mean for patients. At Moffitt, the goal of reducing administrative denials from $4 million to $2 million meant $2 million more to invest back in-patient care.
One more dollar recovered represents one more dollar the Center can invest in curing and preventing cancer. That objective automatically garners excitement and engagement. – Joanna Weiss, VP of Revenue Cycle
Set realistic time investment expectations for employees and leadership: Moffitt estimates that for them, the total time spent on this project is probably half to three-quarters of a full-time employee, or 120-140 hours per month between the report-out, presentations, and meetings.
Schedule regular meetings, starting with a monthly meeting and then reassessing as needed. It’s possible that a monthly meeting won’t be the best use of everyone’s time, at which point you can switch to bi-monthly meetings and designate subgroups to meet more frequently concerning initiatives specific to their teams.
Designate a project manager to oversee all tasks across teams, performing regular check-ins and monitoring progress. At Moffitt, the project manager spent 40% of her time on data trends and root cause analysis related to denials. Once the team has agreed on its action items, the project manager should create a tracking document to manage initiatives across disciplines.
Possible Challenges in Step 1:
When creating a multidisciplinary team focused on denials management you may encounter various challenges, including:
- Resistance to change
- Need for staff training/education
- Limited resources for data analysis
- Evolving payer requirements
- Changing regulatory requirements
- Complexity of claims
- Organizational growth
STEP 2: Determine the Root Cause of Denials
Track the reasons for denials back to the processes from which they originated. Denials can be traced to issues throughout the revenue cycle but most commonly relate to errors on the front end.
Source: “Change Healthcare Healthy Hospital Revenue Cycle Index” Change Healthcare, 2017. http://healthyhospital.changehealthcare.com/wp-content/ uploads/2017/06/change-healthcare-healthy-hospital-denials-index-2017-06-a-2.pdf
It’s critical that your denials prevention program is driven by data rather than anecdotes. Before the first denial steering committee meeting, perform some analysis to drive the agenda. HFMA recommends visually trending the following data to find patterns and prioritize work:
- Claims denied by reason
- Dollars denied/adjusted
- Claims denied and reworked
- Dollars/claims appealed and recovered
- Cost of rework
Moffitt found that radiation oncology claims were being delayed or denied because, even though the diagnosis passed medical necessity, coding wasn’t looking in the right place to get the specificity needed for claims submission. This discovery led to the recovery of millions of dollars in claims.
Begin with a random sample of claims by payer and analyze each payer’s use of codes. Then set a threshold to perform group analysis of any claim over a certain amount. Push the lower-hanging fruit out to individual departments for working. This allows the steering committee to remain at a high level while subgroups, which know their processes best, dive into the details of claim analysis.
Step 3: Create a Path for Success and a Plan for Improvement
It can be challenging to institute behavior change and encourage staff to adopt a denials prevention mindset across the revenue cycle. Many healthcare organizations find it helpful to record conversations to ensure key processes like eligibility verification are occurring and provide transparency to leadership if they’re not. The Trace® platform from Vyne Medical is a healthcare-specific solution that can record face-to-face and phone conversations staff members are having with payers, physicians, and patients. With Trace, conversations are indexed automatically to the patient’s record for easy reference during staff performance evaluations.
Present data at your first meeting and discuss potential solutions as a group. Many issues can be resolved through staff training and/or new technology. Research shows that 30 to 40% of denials result from registration and pre-service-related challenges, so this is a good place to start. The problem may stem from insufficient documentation, an issue on the payer side, or any number of errors in patient access/registration, coding/billing, or utilization/case management.
“Once the root cause is identified, it must be analyzed to determine which has the greatest impact: whether a certain physician, service line, or payer, a certain type of code, or a process in need of redesign in both the clinical and revenue cycle areas. Armed with an analysis, you can begin to both prevent and manage denials in a more strategic, deliberate manner.” – Rethinking Denials Management, HealthLeaders Media
Step 4: Follow These Tips for a Smooth Implementation Process:
Culturally, it may also benefit your organization to reframe the expectations of payers. Manage expectations internally and make sure employees understand that payers operate from a cost-containment strategy. By improving payer relationships, it may be possible to eliminate contract requirements that frequently lead to denials. Schedule regular meetings with payers and be prepared to provide examples when escalation does occur.
Realistically, healthcare organizations will never be able to completely eliminate denials and should still be prepared when they occur. Solutions like Trace can also help hospitals overturn denials by enabling providers to easily capture critical interactions with payers online or over the phone, attach evidence of pre-authorization to the patient record and quickly provide documentation if the need arises.
For Moffitt, documented proof of payer authorization sped up the appeals process and enabled staff to appeal 20-25 claims per day versus 8 per day when appealing just on the basis of medical necessity.
As with any project, not every tactic will be successful. This is why ongoing tracking is so critical. If you’re not seeing progress, make sure staff have implemented the new processes and are properly trained on any new technologies. Then evaluate whether additional actions are needed.
To help each area better understand its impact on denial management, proactively share information about department-relevant denials and actions taken to appeal those claims. This is also an opportunity to conduct root cause analysis of recurrent denials and determine prevention strategies at the department level. At each level of the organization, goals and performance measures should be tied to denial performance for improved awareness and accountability. Send quarterly reports to executive and revenue cycle leaders to ensure transparency and insight across the organization.
We’ve seen our denials go from 14% of gross charges to 8% of gross charges. — Joanna Weiss, VP Revenue Cycle
As a financial leader, it’s up to you to shift your organization toward a more proactive approach to denials. While denials prevention does require an additional time commitment, it’s become a top priority for healthcare leaders across the country. Denials will never be eliminated, but taking measures to prevent just a percentage from occurring will have a substantial impact on your organization’s bottom line.
Want to learn more about creating a denials management program?