Denial Management—A People Problem
Providers nationally face a plethora of challenges none more important than determining a denial management strategy. Payers deny claims for a variety of reasons. The justification for payer denial decisions is a topic for another time—one could point to the stock market indexes and make a case that justification or proof is in the pudding. That aside, without a doubt, challenges with denial management are a growing reality for many providers. In fact, with recent data showing insurance claim denials costing hospitals $262 billion annually, one could say providers versus payers is the modern-day version of the Washington Generals versus the Harlem Globetrotters. The game is “rigged”, and one team is winning.
Investment in denial management structures and processes is vital. Structures include technology, but technology alone is not the answer. Structures in this case means an organizational chart with defined expectations and people with the necessary experience to achieve specific goals. This centralized denial team is not a fresh concept, however very few organizations reach the pinnacle of what is possible.
- Centralized denial management staff lack the necessary experience to successfully navigate denied claims.
- A denials management “task force” is used in place of a truly centralized team.
- Formal training, even if provided, lags the pace of employee turnover.
In order to successfully manage denials, it is imperative that providers invest in a denials team with diverse experience. The ideal team would consist of individuals with expertise in case management, coding, revenue integrity, patient access, billing, and physician documentation. Those individuals would all report to the same team with one person overseeing communication, work flow, and reports.
So, what is preventing an idea that is universally accepted to succeed? Quite simply, money.
Competitive salaries and formal training lack, and new positions are not created due to budget constraints. In our experience, leveraging partners with unique expertise to manage denials related to coding and clinical validation provides a significant return on investment. In fact, according to a Black Book Report, outsourced solutions are on the rise. Approximately 83 percent of hospitals currently outsource some accounts receivable and collections, while 68 percent of physician groups with ten or more practitioners outsource a combination of collections and claims management. Among the benefits:
- Allowing department leaders more time to manage the many functions and people they oversee.
- Drastically higher overturn rates through leveraging experts with a focused purpose.
- Independent reporting helpful with root cause and data analysis.
- Non-biased feedback to be used to negotiate payer contracts and for best practices for specific cases/situations.
Hospitals have made million-dollar investments into electronic health records (EHR) and bolt on technologies aimed to assist the denial process. In too many cases, imperfect workflow builds within EHRs and patient accounting systems are the genesis of the problem. The required knowledge to fine tune those systems and maximize hospital investment is the often-overlooked component of the equation. Yes, there are cases where the necessary playbook or strategy needs work. In all cases however, hospital leaders continue to trot out the same lineups against the globetrotter payers and then escalate that reality by failing to empower their players with the essential education and information required to compete against those organizations. To overcome these challenges, organizations must evaluate the sum of their parts and create specific roles to own the various pieces of the denial process. They need a point guard to manage the process and streamline communication. On occasion, they will need to pull an expert off the bench and partner with an organization that specializes in appeals or a specific area of expertise that can’t be obtained internally.
Providers do have options, but each of those options requires investment in people. Hire, educate and train or outsource to an expert. The value of human intellectual capital provides exponential return. Posting the same job descriptions with the same salary and accepting the same level of talent has and will continue to cost providers billions. Maybe providers are doomed to play the role of the Washington Generals—the odds are stacked against them and they have the societal responsibility of providing care. I am cheering for them to at least keep the score close, and at Harmony we work extremely hard to help them maximize the investments they have and will make in the future.