Case Management (CM) plays a pivotal role in ensuring the Revenue Cycle (RC) operates efficiently and effectively by improving patient care and patient relationships, reducing denials, and enhancing the organization’s overall financial performance. Within the denial reduction scope, an effective Case Management department can pre-emptively address encounters that have a higher likelihood of medical necessity denials to ensure streamlined compensation.  According to Change Healthcare, their research shows nationally that medical necessity denials are about 5% which can significantly impact a healthcare organization’s bottom line.   

Medical necessity denials can occur when there is a discrepancy between the requested services and the established criteria for approval.  To reduce the financial impact of denied services, establish a Case Management Denial Prevention Program.  Here are a few key components, not all-inclusive, to consider when developing a program:

1) Case Management/Revenue Cycle Integration

Case Management plays the role of a bridge between the clinical and financial teams. Integrating CM into the RC to manage reimbursement issues related to medical necessity denials is fundamental to the financial health of the organization.  An organization should consider establishing an interdisciplinary team with members from CM and RC to meet on a regular basis to discuss reimbursement issues, denials, and metrics.  Each team member should comprehend the impact of their work on the workflow of others to contribute to the analysis of reimbursement issues, identification of root causes, and implementation of action plans.   

Integration strategies should include, at a minimum:  

    • Integrating Case Management into essential organizational functions and initiatives, such as Managed Care.  The Case Management team can serve as the initial line of defense, identifying any payer practices that could adversely affect the organization’s operations and financial position and inform any active or future contracting discussions.
    • Commit to the involvement of Revenue Cycle and Finance representation and participation in the hospital’s Utilization Management Committee aiming to bolster case management processes and system-wide process improvements. 
    • Clearly delineate the allocation of denial management responsibilities and accountabilities between Case Management and Revenue Cycle.  Typically, Case Management is responsible for medical necessity denials but occasionally, the medical necessity denial may comprise aspects of billing and coding.  Establish cohesive processes between Case Management and Revenue Cycle to successfully address and resolve the denial.

2) Clinical Care Guidelines

When analyzing denials, don’t forget to review the application of your evidence-based clinical guidelines, e.g., InterQual, Milliman Care Guidelines because there are improvement opportunities that can be identified – inappropriate admissions, the inappropriate level-of-care is selected, or the patient remains in the hospital without admission criteria. These opportunities all reside – within your denial data.    

Case Managers should be staffed in all points of entry, e.g., Emergency Room, Surgical Suites, to prevent denials before they occur – making sure patients meet and are placed in the correct level of care status.  If a patient is admitted from the Emergency Department (ED), does the admission criteria applied by the ED Case Manager align with the initial clinical review completed by the CM staff?  If not, why? Be able to identify the appropriate root cause, provide feedback, and implement preventative measures to eliminate or reduce the number of mismatched occurrences. 

Clinical Care Reviews should be completed and submitted to the payer according to their frequency standards.  If clinical reviews are not submitted in a timely fashion, an organization runs the risk of an admission being denied and loss revenue.  A best practice is to establish metrics that monitor payers’ requests or denials for missing clinical care reviews and address the root cause(s), e.g., staffing issues, incorrect payer information, late admission notification.  

3) Case Management Joint Operating Committees (JOCs)

As healthcare organizations continue to face increase denied claims, it is essential for an organization to develop and maintain strong relationships and schedule recurring meetings with payers.  The meetings should have a collaborative approach allowing open discussion and communication to address any outstanding operational and contractual issues, e.g. authorization, in-house denials, peer-to-peer processes, appeal processes.  At a minimum, hospital representatives should include team members from Case Management, Managed Care, Finance, and Revenue Cycle.  The CM JOC meeting is not intended to replace the RC JOC meetings – each JOC has its own focus and agenda.    

4) Case Management Performance Metrics

CM teams and Utilization Management Committees proactively manage inpatient admission and observation rates, readmission rates, length of stay, avoidable days, discharges, and retrospective denial metrics.  The Case Management team frequently faces difficulties due to insufficient insight into trends associated with medical necessity denials.  Without proper data and analysis, it becomes challenging to pinpoint root causes, recognize patterns, and implement focused improvements.  

Organizations should implement a robust system for tracking medical necessity pre-claim and post-claim denials.  One consideration would be to expand the capture and analysis of additional data metrics beyond the historical data captured.  This can provide insight to recurring denials, e.g., volume of in-house denials, peer-to-peer metrics, initial vs continued stay denials, physician specific denials.  The additional metric information can also be utilized in your Case Management JOCs meetings to drive and facilitate improvement.  

Conducting a regular analysis of denial data to identify root causes and trends is necessary to further support your denial prevention program.  Once completed, communicate the analysis findings, and create feedback loops to the appropriate department, committees, e.g., Case Management Department, Utilization Management Committee, Physician Advisors Committee, Denial Committee.  Finally, develop and implement comprehensive corrective action plans based on the findings to decrease your length-of-stay, denials, cost, appeals, and help improve quality.     

5) Denial and Appeal Processes

When claims are denied unnecessarily, the results are delay in care, increased cost, and have the potential loss of revenue.  Organizations must develop structured and efficient denial and appeal processes for pre-claim and post-claim denials.  These processes must include the provider, Case Manager, and Physician Advisor, e.g., denials with Peer-to-Peer option.  

Denial with Peer-to-Peer Option.  When a denial with a peer-to-peer option is received, organizations should have a vigorous peer-to-peer process established.  By engaging in direct dialogue between the payer and the hospital provider, decisions can be made promptly.  This streamlined approach ensures that claims move through the normal adjudication process timely, therefore reducing denials, appeals, and administrative costs.  A well-designed peer-to-peer process includes:

    • Providing training for physicians and other stakeholders involved in the process to ensure consistency and standardization in decision-making.
    • Establishing guidelines, protocols, and best practices to enhance the effectiveness of peer-to-peer conversations and minimize potential misunderstandings or conflicts.   
    • Tracking of peer-to-peer outcomes to identify any recurring issues or patterns in payer behavior in which organizations can implement targeted interventions to address the underlying issues and/or address in the Case Management JOC meetings.      

Even with the dedicated efforts of the Case Management’s team to avert denials, they still may occur, leaving an appeal as the sole recourse.  Like the denial process, make certain the appeal process is comprehensive, clearly documented, and transparent and seeks involvement and feedback from the provider, Case Manager, Finance, and the Physician Advisor.  By seeking their participation and feedback within the appeal process, it allows them the opportunity to align medical necessity guidelines, documentation, and training as needed.  Also, when in-house and/or post-claim denials are received, don’t forget to close the feedback loop, and communicate, document, and share the outcome with the Revenue Cycle team.     

Case Management is an essential part of the revenue cycle in healthcare, as it bridges the gap between clinical care and financial operations.  Implementing a robust and comprehensive Case Management Denial Prevention Program will optimize patient care, reduce denials, enhance overall financial performance, and allows the Case Management team to contribute to the financial success the organization.  And as healthcare continues to evolve, the role of Case Management in the Revenue Cycle will only become more critical making it a cornerstone of modern healthcare administration.   

At PinnacleHCA, we work with our clients to establish Case Management Denial Prevention Programs. If you would like to learn more about our client work, please reach out to [email protected]

Sources:  

www.changehealthcare.com/insights/reduce-denials-win-appeals-improve-hosptial-performance#