Why are HIMS professionals becoming increasingly concerned about claim denials and audits?

Often, claims denials come attached with this Alert; “Documentation does not support inpatient level of care”?

Claims denials are a rising concern for hospitals, health systems and physician practices as they are very disruptive and costly.    With Fraud, Waste, and Abuse on the rise and growing 6.5% per year the denial patterns are also rising.

When revenue cycles are disrupted by claims denials Everyone gets involved in fixing the problem.   Key stakeholder functions and groups include coding, patient access, utilization management, managed care, revenue cycle, clinical documentation improvement teams, health information management professionals, legal, compliance….just to name a few.

If you don’t get to the root cause and put effective lasting corrective actions in place….EVERYDAY will be  “Ground Hog Day” similar to Bill Murray’s popular movie.

Sharecare is tackling some of the biggest problems impacting the “TRIPLE-QUADRUPLE AIM”.   Sharecare uses expertise and technology to help healthcare providers find the root cause and we put work collaboratively to implement lasting corrective actions .  We like to say once we engage “the past does will not equal the future”

3 New emerging trends that are a concern for all providers.

  1. Clinical validation. We’re seeing an increase in clinical validation denials that are based on a combination of clinical indicators and coding references by the payer.
  2. Payer DRG targets. Payers tend to focus on 10 to 12 diagnoses. Use of data analytics to identify the diagnoses that show the highest denial rates and revenue risks is the foundation for building an active denial prevention and appeal strategy.
  3. Managed care contracts. Organizations are increasingly focused on how diagnoses are defined in managed care contracts and the impact on payer denials.

Sharecare uses advanced AI technology and Analytics to process denial data and pinpoint root cause.

Claim Adjustment Reason Codes (CARC) are used to communicate a reason for a payment adjustment — these define why a claim or service line was paid differently than it was billed?

Another common denial reason for the claim is;  “not deemed a medical necessity”.  This is a vague blanket reason, however, what is the true denial reason?

As everyone knows, denial issues can be related to coding, documentation or incorrect status. However, what did the organization do to cause the denial?  Did the claim have one issue or multiple contributing problems. It all starts with the medical record.

Sharecare often fixes problems caused by non-Sharecare release of information vendors who send the hospital medical record in response to an audit request omit sending the necessary corresponding physician office medical record with documentation on prior encounters.

To avoid denials, it is important to collect valid data based on actual root cause rather than simply relying on the reason codes returned by payers on 835 remittances and explanation of benefits. When properly collected, analyzed and reported, we can pinpoint:

  • Denial patterns essential for development of denial management strategies.
  • The service site, service type, payor and possibly physicians where issues begin for aiding in training strategies.
  • Opportunities for improved payor contracts and audit policies.

The benefits of a Sharecare technology approach to denials management rapidly:

  •  Determine the root causes of payor denials
  •  Capture any coding and clinical validation changes
  • Develop targeted education on the front end of the revenue cycle
  •  Increase knowledge of payor contract terms
  •  Move toward proactive claims denial prevention
  • Organize, refine and Centralize workflows for appeal efficiency and effectiveness

Let Sharecare conduct a vulnerability assessment to determine your error rates and associated risk score

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