Why claims are denied — and how you can fight it
Reduce denials by staying on top of changing regs
With high-volume claims denials threatening to cripple its budget, the University of Pennsylvania Health System in Philadelphia turned to its department of clinical resource management and social work to address the problem.
The first step, says Maryellen Reilly, MS, MT, director of the department, was to identify the most common reasons managed care organizations were giving for denying claims. The primary reason was what payers somewhat euphemistically called "delays and inefficiencies," Reilly says. Often, they cited delays in transfer to a psychiatric or rehabilitation unit, but most commonly the denial resulted from a delay in discharge. These "delays," however, usually resulted not from inefficiencies but from a disagreement in clinical judgment between the attending physician and the payers.
For example, if a patient undergoes extensive abdominal surgery, the physician wants to be assured that the bowel is functioning prior to discharge. The payers often disagree with the physician’s judgement regarding the "milestones of bowel function" and deny the last day of the patient’s stay. "In those instances where there is a clinical disagreement, we will always defer to the clinical judgement of our physicians regardless of the payer decision to deny it," Reilly says.
Other reasons cited by payers include:
• Administrative denials.
Each payer has a list of expectations regarding notification time frames for admission and concurrent review, claims formatting, etc. If any of these requirements is not met, the reimbursement for the entire episode of care can be denied.
• Admissions denials.
These are cases in which the pater feels that the care could have been provided at a lower level of care and denies reimbursement for the entire stay.
• Placement denials.
These denials, which occur at the end of a patient’s stay, often result from a dramatic change in the patient’s condition which prevents the patient from returning home immediately. While the hospital personnel are seeking to identify a facility who can provide the appropriate level of care for the patient, the payer often defines those days as no-acute and reduces or denies reimbursement to the facility for the care provided during that time.
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