Compliance Update: Root Out the Sources of Medical-Necessity Denials

5 questions that guarantee successful investigation

Since the advent of OPPS and its accompanying line-item editing software, Medicare medical-necessity denials have skyrocketed - but these foolproof strategies will keep reimbursement in your facility's pocket.
Pinpoint the Leak
You can't plug your financial leaks unless you know exactly where they are and what can be done, so find out where you stand with a few crucial questions, says Kathy Arner, LPN, RHIT, CCS, CPC, senior coordinator for physician auditing at Geisinger Health System in Millville, Pa. The answers will focus your review on spots that cause trouble.
1. How many claims are getting rejected? How much do you estimate you're losing in revenue from these denials?
 2. Are the local medical review policies (LMRPs) updated? While you're at it, make sure your ICD-9 and CPT codes are up-to-date.
3. How does your hospital handle claim rejections?
4. Do you know the reasons for  your denials? If you think the denial is inappropriate, do you talk to your fiscal intermediary?
5. Is there an efficient appeals system in place?
Create a Delegation
It's unlikely that a single person can effectively deal with all medical-necessity issues, says Darren Carter, MD, president of Provistas in New York City, so to streamline the process, he advises creating a multidisciplinary "denials team." Include hospital staffers with diverse areas of relevant expertise: compliance officers, coders, registration staff, physicians, and staff members who work in patient accounts.
"You have to designate some responsibility for this process at your institution," Carter says. Including members from different areas ensures that the group is equipped with both the clinical background and billing knowledge to customize an ongoing approach that works.
You'll also need to create a no-nonsense denial appeals program. You may think that hiring an employee for this sole purpose won't be cost-efficient, but Carter insists that your spike in reimbursement will more than accommodate this person's salary. If you've already got a qualified person on staff, don't be afraid to assign her this task - but be prepared to push her buttons, Carter says. Hospital employees tend to be apprehensive about triggering audits and may be hesitant to refile claims without nudges from a higher-up.
Don't Let Software Do Your Homework
While computerized management of LMRPs may be a valuable billing tool, it is no match for solid coding knowledge and physicians at the top of their game - because a computer can't evaluate exceptions as well as a person can. For example, some LMRP text doesn't translate into the tables the machine reads. So a service that qualifies as medically necessary according to [...]

- Published on 2003-10-08