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ARE HOSPITAL CLAIM DENIALS AVOIDABLE?


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Rising medical costs, staffing shortages, and wildly fluctuating patient numbers
continue to put pressure on the healthcare sector. In addition, for many
hospitals, claim denial rates are on the rise, increasing more than 20 percent
over the past five years.1 These obstacles have caused significant financial
consequences for hospitals and healthcare systems. However, many denials can be
avoided when rigorously evaluated at the time of admission (or when observation
status transitions to inpatient). The question then becomes: How and when can
these claim denials be avoided?


APPROPRIATE EVIDENCE TO SUPPORT: WHY SOME DENIALS MAY HAPPEN

While medical necessity denials have been increasing at an alarming rate,
clinicians should not compromise value for short-sightedness. A ‘make it meet
criteria’ philosophy is often seen as a statement made by finance or hospital
administration if observation rates within the system are high. While this may
seem like a feasible billing strategy, many claims are still denied as there was
no medical necessity to support an inpatient order.

‘Copy and paste’ without analyzing the medical record is often the next reason
inpatient admissions are denied. Most payers do not have the staff or bandwidth
to sift over pages and pages of clinical information that was not read or
properly evaluated by the sender. Best practices indicate that clinical
information – when concise yet well described – helps leave nothing to chance.

Lastly, utilization review nurses typically follow the physician’s order.
Therefore, if it was ordered by the physician, many may assume it must be
accurate. Utilization reviewers may not want to ‘bother’ a physician for a
change in status or call for a different order. Often, UR nurses feel that
physicians are too busy to interrupt, or that they lack the position to question
the order. There are times when a physician’s choice of inpatient or observation
status is not always correct, and without appropriate documentation, should not
be used as the primary status determiner.


THE FIRST STEP: COMPREHENSIVE (YET CONCISE) CLINICAL DOCUMENTATION

Many times, claim denials can be significantly reduced through robust,
evidence-based documentation. This is the first step in a successful strategy to
prevent denials and improve clinical documentation. Payers formulate their
medical necessity determinations based on the documentation sent directly from
the provider. Their review process typically includes clinical criteria, a
patient’s (or member’s) presentation, prior medical history, treatment plan, and
the patient/member’s response to treatment.


THE SECOND STEP: EVIDENCE-BASED SUPPORT

In today’s healthcare model, clinicians bear the burden of proof to support
inpatient admissions. In other words, they must justify the level of care
determination, and that decision must be well documented. One way that they can
support these decisions is to apply evidenced-based criteria (such as MCG care
guidelines) for every review. MCG care guidelines are analyzed and written based
on peer-reviewed papers and clinical research studies. These guidelines are
reviewed (and updated as necessary) each year. By aligning a patient’s
presentation with the corresponding evidence, clinicians can help reduce
unnecessary denials from the payer. This occurs through a comprehensive review
of the medical record that includes a patient’s history, presenting symptoms,
test results, diagnostics, and medical treatment.

To provide additional support for healthcare organizations, MCG Consulting is a
new service that is available to help clinical staff optimize utilization
workflows. MCG’s team of trusted advisors offers creative and comprehensive
strategies to transform organizations into leaders in evidence-based practice
and financial sustainability. MCG Consultants offer a firsthand approach to
support teams as they work to solve current problems, attain new goals, and
develop insights to guide transformational changes.

In future blogs, MCG Consultants will examine concepts such as continuing care,
end-user workflow processes, and multidisciplinary rounding (MDR).

By Cathy Nelson, MBA, BSN, RN, CMPC, CTT+, Senior MCG Healthcare Consultant, MCG
Consulting. Published May 23, 2023.

The information contained in this article references MCG care guidelines for
those in the specified edition and as of the date of publication and may not
reflect revisions made to the guidelines or any other developments in the
subject matter after the publication date of the article.

Image courtesy Shutterstock/Thicha Satapitanon

--------------------------------------------------------------------------------

References:

 1. Poland, L. Claims Denials: A Step-by-Step Approach to Resolution. Journal of
    AHIMA. March 22, 2023.
    https://journal.ahima.org/page/claims-denials-a-step-by-step-approach-to-resolution

--------------------------------------------------------------------------------

 

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