How to Fight Denials
May 1, 2023 6 minutes read
By Jeni Miller
Denials happen. According to a Kaiser Family Foundation analysis of CMS data, 17% of in-network claims — and sometimes up to 80% of claims — were denied. Consumers rarely appeal denied claims, and more than half the original decisions still stand after the appeal process.1
However, case managers do not have to settle for denials. In fact, they can use their skills to overturn denials. There are certain tactics that can help in this process, and some case management professionals even specialize in this.
Citing the 18% to 80% denial rate, Sandra Branson, MA, BSN, RN, ACM-RN, clinical denials manager at Children’s Hospital of the King’s Daughters (CHKD) in Norfolk, VA, works tirelessly to help turn things around for her patients.
“That’s a crazy amount of money on the table at risk for nonpayment or delayed payment,” Branson says. “CHKD is a 206-bed standalone pediatric hospital, and we recently opened an inpatient pediatric mental health hospital, Children’s Pavilion. We serve so many children, teens, and their families. At the risk of sounding overly dramatic, if we don’t fight the denials, we risk not being available to serve these families and carry out our mission one day.”
What Causes Denials?
Branson names these most common root causes of claim denials:
- Medical necessity, level of care, continued stay (the most common reason);
- Acuity level;
- Delay of service/transfer;
- Experimental/Investigational;
- Readmission;
- Retrospective audits/clinical validation;
- Administrative.
Branson also notes many denial trends can be uncovered using data analysis. “A strong data program is essential to a strong denial program,” she says. “We look at monthly and yearly trends of denials by diagnosis, length of stay, reviewer, MD, and payer. We also analyze trends by outcome, and look at upheld denials by diagnosis, length of stay, and payer.”
The data can help providers create a plan for denial prevention and education. “We have found trends also are important to share with payers,” Branson explains. “I have begun attending our monthly Joint Operations Committee [JOC] meetings with various payers. We’ve given our high denial payers a report card with their denial rate. We share with the provider reps the excessive amount of work that is going into denials to get these accounts paid. If we have an issue getting authorizations or denials processed, we take the issues to the JOC meeting. We have had a lot of success getting issues resolved this way.”
A Recipe for Success
Discovering these trends can be a great tool for education with case management review nurses or physicians. “Every denial is an opportunity for education,” Branson notes. “See if there is a preventable trend. See if the evidence-based guidelines were used appropriately or if there is room for improvement.”
At CHKD, Branson and her team report a 65% to 70% of overturning appealed denials. The denial process takes great tenacity, in part because it is so time-consuming.
“Writing thoughtful and thorough appeals as well as the follow-up can take a long time,” Branson says. “But it is definitely worth the time spent. Claims, even for a very short stay, could have an expected payment of $1,500 to $4,000. Every denial is worth fighting. Winning 65% of the appeals is worth the time.”
With that in mind, Branson recommends case managers who want to fight denials and earn a high rate of overturned denials work on these skills:
- Perseverance. Every step of the denials process presents obstacles. It is important to learn how to overcome them.
- Excellent communication. Understand what is denied and the appeal process as defined by the payer. Learn how to form a clear, concise argument with supporting documents for the appeal rationale.
- Collaboration with attending physicians, physician advisors, review nurses, and patient financial services. These relationships will assist in helping to prevent denials and create effective appeals.
- Remaining calm. Fighting denials is frustrating, and often an uphill battle. Find healthy ways to vent. Take a deep breath, reframe your thoughts. Celebrate the wins.
- Staying organized. Organization keeps the stress level down. Denials management includes many details: correspondence letters and emails, deadlines, and contacts. Find a system that keeps information, deadlines, and workflow organized.
Preparing to Fight Denials
Even if a hospital case management department does not employ a specific clinical denials manager or other professional solely in charge of denials, case managers can take steps to help overturn denials.
“Each payer is unique in their appeals process and requirements,” Branson explains. “Denials management starts with the facility contract with the payer, and then moves to the payer/provider manual for general understanding of the payer appeal process. The account-specific denial letter focuses on that specific account denial, describing the type of denial and the reason. The denial letter should outline the payer appeal process. We make sure we follow that to the letter.”
While Branson and her team at CHKD serve a large Medicaid population and are mostly familiar with the Medicaid authorization denial and appeal process, each hospital uses its own process and guidelines according to the payers they work with most often. As an example, Branson shares the process for Medicaid authorization denials.
“We are usually offered three levels of appeal,” she says.
First, the reconsideration is an informal opportunity to give more information to the payer. It can be additional clinical information for dates of service or a summary of the stay with specific rationale supporting inpatient admission.
Next is a peer-to-peer, which is an appeal that gives an opportunity for the CHKD physician to speak with the payer medical director and appeal with a discussion.
Last is a written appeal, which is a formal letter outlining rationale for the inpatient stay. Typically, it is sent to a different physician than the original physician who denied it. CHKD always requests a specialty reviewer (e.g., pediatric surgeon, pediatric cardiologist), and the payer should honor that. Sometimes, denials are upheld with a reconsideration and/or a peer-to-peer but are overturned with a written appeal. It is worth it to appeal several times, if necessary.
An Ounce of Prevention
The appeal process can take a considerable amount of time, even if it is worth it in the end. Branson reiterates preventing denials in the first place is the goal. There are several tactics case managers can use to prevent denials:
- Get the patient’s status right from the start. At CHKD, the utilization review team reviews nearly 100% of admissions for status.
- Learn how to tell the patient’s story of admission to the payer clearly and concisely.
- Know the provider manuals regarding admission notification requirements and administrative deadlines.
- Follow up on authorizations daily, if necessary.
- Use portals when possible.
- If there are questions regarding status, discuss with attending physicians and physician advisors.
- Educate the utilization review team in the evidence-based guidelines used to determine status.
- Become an expert. CHKD holds monthly interrater reliability cases with the case managers. They review the same case and discuss decision-making to ensure they are reviewing consistently.
- Hold weekly utilization review meetings to discuss current authorization issues as well as denials that have been reviewed, with an opportunity for improvement. When appropriate, discuss denial trends with actionable items.
- Educate physicians on evidence-based guidelines and inform them of denial trends with actionable items, when appropriate.
Worth the Effort
When Branson started as the CHKD denials coordinator in 2017, she was the first to hold that position. In 2022, she became the clinical denials manager, and the team expanded to three people, including another denials coordinator and someone to handle the administration, data coordination, and follow-up.
Focusing this much attention on overturning denials is paying off for CHKD. “Each year, our initial denial rate has increased from 7.3% in 2019 to 10% in 2022, but the at-risk dollar amount of denied accounts has risen dramatically. This year was more than $30 million,” Branson explains. “We cannot afford to just let the denials go unanswered. We have recovered more than $23 million so far, and our final denial rate after appeals has stayed steady — between 2.3% and 2.8% of all admissions. We are very proud of these accomplishments.”
REFERENCE
- Pollitz K, Lo J, Wallace R, Mengistu S. Claims denials and appeals in ACA marketplace plans in 2021. Feb. 9, 2023.
Case managers do not have to settle for denials. In fact, they can use their skills to overturn denials. There are certain tactics that can help in this process, and some case management professionals even specialize in this.
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