Denial rate targeted by examining causes
Admitters no longer take the blame
Taking a hard look at the reasons behind the failure to get valid "precerts" for patient procedures has put the Baptist Health System in Birmingham, AL, on the path to turning its denial rate around, says Betty McCulley, corporate director of admitting for the 10-hospital system.
"The business office was frustrated because all they could see were precert denials and bills not getting paid," she adds. "They were not sure who to send [the bills] back to because there was not a defined line of accountability." For that reason, McCulley notes, it was just "all of admitting" who were the bad guys.
At that point, she says, "we weren’t even sure how much we were losing [to denials], but we knew it was substantial."
Team uncovers reasons for denial
To address the problem, McCulley formed a team made up of the admitting directors at the system’s 10 hospitals, who in turn formed individual teams at their own facilities. "Everybody did a flowchart of all the ways patients could be admitted," she says. "Some hospitals only have one registration area, and the large ones may have as many as six entry points."
To determine accountability, the teams got very specific, McCulley notes. "Every single reject sent from the billing office came to me, and I sent them to the appropriate [admitting] director."
Reasons for the denials fell primarily into these categories:
1. The physician’s office put the wrong precert number on the admitting form.
"Whether it was an honest mistake or a misunderstanding [on the physician staff’s part], we had the wrong authorization number," she says. "It looked as though the visit was authorized, but a month later, we’d find out it was not a good number."
2. Patients arrive at the emergency department without their insurance card.
"In a true emergency, a person may not bring proof of insurance, so the registrar enters that person as a private-pay patient until somebody drops off the information," McCulley notes. "If that information is brought in two days later, we’ve missed the window of opportunity within which the insurance company must be notified. It’s the patient’s fault, but some HMOs won’t let you bill the patient."
3. The reviewers who oversee cases for various insurers claim not to be aware of some patients, so authorization is not obtained in the required time frame.
"Some insurance companies have reviewers who come on campus every day and check all their patients," she says. "Hospital case managers would say they notified the reviewers of cases, but [the reviewers] said they were not notified." In such situations, it became one person’s word against another’s, McCulley notes.
It took extensive team efforts simply to identify this problem, which turned out to be behind the majority of denials, she says. Procedures were changed to create a paper trail that would show the insurance reviewers had been notified.
"Before, the case manager would print a face sheet for each case and often just leave it in a tray for the insurance reviewer to pick up," McCulley says. "Now, in addition to the paper trail, case management provides the insurance reviewers with a report that includes all their company’s cases."
Focusing on accountability
The precert teams have been in place a little more than a year, but it took six months "just to get enough statistical data to figure out what was going on," she points out.
Getting the wrong precert number from the physicians’ offices is "still something we’re struggling with," McCulley says. "We’re keeping statistics and tracking cases by physician. If we find a physician that does it more than once, and then more than twice, there is a medical advisor — representing administration — who meets with that physician and tactfully says, What can we do to help you?’"
The precert teams have developed written accountability guidelines for all those involved in obtaining a valid authorization, she notes, and statistics are shared with the administration and other departments, a powerful incentive for improvement.
Thanks to educational efforts, admitters are more aware that they should stop and call the physician’s office when registering a patient who arrives without a precert number, McCulley says. "Then it’s [the physician’s] call as to whether they should go ahead with the procedure or reschedule."
Admitters have been comforted to learn that only a small percentage of the precert denials were due to their oversights, she adds, and they have begun communicating with the business office, which previously had blamed admitters for the problem.
Outside interests a big threat
The biggest threats to successful precerts are outside factors, she notes, "like the insurance reviewers. It’s in their best interest if the accounts don’t get paid, so we make sure to give them everything we can so they have no reason to deny."
It’s particularly frustrating, McCulley adds, when insurers deny coverage for a procedure that’s not on the list of those that must be precertified. "We say, It’s not on your list,’ and they say, We haven’t given you the latest list.’"
She continues to explore ways to reduce the inaccurate precert numbers given by physician offices, including the possibility of rewarding physicians in some way when they provide good precerts.
Although denials are still a problem, their number is declining, McCulley says, as the department continues trying to recoup reimbursement for past cases.
At one hospital in the system, there were 147 denials in the eight-month period from July 1998 through April 1999, which represented $809,903 in lost revenue. To date, the hospital has been able to recoup $379,722 of that amount, she adds.
Recovery efforts continue, McCulley says, but "our goal is not to have the denials to start with."
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