My Favorite Denial

April 18, 2016

IMG_8720-fewer pixels by Seth Avery, AppRev President and CEO

Everyone has a favorite denial. More specifically, everyone has a favorite Claim Adjustment Reason Code (CARC). You know CARCs…those annoying adjustment codes on your remits. The CARCs are supposed to tell us why Payers value our carefully crafted claim at zero.

I review hundreds of claim and remit figures from hundreds of hospitals every year. You’re jealous, I can tell. My expedition into this deep mine of data does yield a nugget of gold every once in a while.

My current love is CARC #13, “Date of Death Precedes Service.” Sounds like a fatal denial, huh? But it most certainly is not. I have customers who overturn it more than 50% of the time. Not surprisingly, most of the denials are Medicare.

What happened to this unfortunate patient? Were services not provided to them after they passed away? Of course, it’s more likely that the date of service is simply incorrect.

Here’s what I tell my customers about management of all denials, not just the outlandish ones: Regardless of the approach you take to denials management, be sure that each and every denial is clearly identified and has a dedicated staff member assigned to resolving it.

By approaching denials management issue by issue, you will soon see your total and average recovery rising. And who knows? Your career might just rise along with it.


ICD-10 Aftermath: How did your hospital fare?

February 16, 2016

We’ve made it through the first three months of ICD-10. How is your organization doing? Did lighting strike? Did the ground open up and swallow your hospital or practice? Probably not. But you did experience some sort of change, some growing pains, and most likely you surprised yourself with how smoothly almost everything else went.

What changed? We want to know how. AppRev is conducting a post ICD-10 Implementation Study to take a look back at six crucial months of data: the last three months under ICD-9 compared to the first three months under ICD-10. We’ve received some data so far, but there’s always room for more. The more, the merrier, in fact!

From you, all we need is a small amount of data entered into a simple spreadsheet. We’ll do the rest – from analysis and comparison to organizing and publishing the results. AppRev will announce the results of the study at HFMA Region 5’s Annual Dixie Institute on March 21, 2016, in Nashville, then the results will be released to the general public through ICD-10 Monitor’s Talk Ten Tuesday podcast on March 22, 2016. Afterward, the complete results will be made available during AppRev webinars, at HFMA conferences, on our website at www.apprev.com and upon request. Want a copy of the results? No problem. Just ask and we’ll send them your way.

(Please note: No hospital or practice names will be published. We know you value the integrity of your organization’s privacy and security. All information will remain confidential. We’re just interested in the numbers and trends).

So, exactly what information are we looking for?

We’re gathering the following Key Metrics:

  • Days Cash on Hand
  • Discharged Not Final Billed (DNFB) in Charges
  • Net Days in A/R.

Regarding Denial data, we’ll be collecting the following:

  • Initial Denial Rate
  • Authorization – Percentage of Initial Denials
  • Authorization – Number of Denials
  • Medical Necessity – Percentage of Denials
  • Medical Necessity – Number of Denials

Would you like to see how your organization’s performance compares to the experiences of a larger group? Then join the party! This is an opportunity to be a part of something that no one else is doing. There will only be one ICD-10 transition.

Have any questions or want further information? Please contact us. We’ll be happy to talk to you about the study and our plans for use and distribution of the data. See complete details (including a download of the spreadsheet) here: http://apprev.com/icd10-study.php.

We’re looking forward to meeting you and seeing how things have played out for your organization under ICD-10!

 

 

 


Medical Necessity, Denials and ICD-10

March 18, 2014

While working with one of our customers on our Denials Intelligence, I was asked about ICD-10 and its impact on denials.  I have a position on this that I would love to share.  I see three issues related to, denials caused or increased.

Inpatient Coding

Currently, ICD-9 is primarily used for inpatients to group DRGs and denial risk is limited to payers that use ICD-9 for reimbursement.  So, providers will document.  Coders will code.  Groupers will group.  The potential breakdown will occur where the documentation or coding is not specific enough to create a groupable DRG.  In “denial speak”, that should be a Claim Adjustment Reason Code (CARC) “A8”.  I assume if you have those in your data now, you will have those and more with ICD-10.

Outpatient Coding

Ditto for inpatient coding with the complexity of medical necessity.  ICD-9 codes are used in the outpatient setting primarily for medical necessity.  I am guessing that few payers, outside of government, perform automated medical necessity checks.  Those claims subject to medical necessity must pass either National Coverage Determination (NCD) or Local Coverage Determination (LCD) edits to be paid.  While the ICD-10 grouper has been around for over three years, we have not seen the LCD and NCD tables yet.  They are expected to be released in April, 2014.  If you are getting these denials now, in denial speak that should be a CARC “50”.  I assume if you have those in your data now, you will have those and more with ICD-10.  I would be interested to know what other CARCs payers are using to indicate lack of medical necessity.

Contractual Terms

On occasion, payers will have terms that are specific to ICD-9 diagnosis or procedure codes.  This is another source of potential ICD-10 denials.  Providers will have to work with payers to determine which ICD-10 codes are replacing the ICD-9 in the contracts.

Conclusion

A wise man recently said to me, “If you expect your denials to double under ICD-10, then you better cut them in half now.”

For more information on ICD-10 readiness and Denials, please visit our website.


The Financial Impact of Readmissions

June 5, 2012

Readmissions are no new occurrence in hospitals and with 20 percent of Medicare patients readmitted a year, they also are not uncommon.  Medcap reported that readmissions within 30 days accounts for 15 billion dollars of Medicare spending.  New legislation signed into law by President Obama will penalize those hospitals that have high preventable readmission rates.

Why the penalty for readmissions?  Beyond the exorbitant cost to Medicare each year, readmissions often mean poor quality of care.  Research shows that patients who were readmitted were 55 percent more likely to have had a quality of care problem.

But, with the current Medicare fee for service are hospitals really incentivized to decrease their readmissions?  Hospitals are paid per discharge, not by the amount of time a patient is in their care, or the quality of care they provide.  A hospital with poor discharge instructions (more likely to readmit) receives the same fee as a hospital with top quality discharge instructions.  So, is it really surprising hospitals are having high readmission rates?

What do these penalties look like? The Center for Medicare and Medicaid finalized the calculation of a hospital’s excessive readmission ratio for Acute Myocardial Infraction, Heart Failure and Pneumonia.  The ratio compares a hospital’s readmission rate to the national average.   CMS will use the risk adjustment methodology (endorsed by the National Quality forum), which takes into account factors such as demographic characteristics, comorbidities, and patient frailty.

The result is this ratio:

Excess readmission ratio (finalized in FY 2012 IPPS/ LTCH PPS rule) = risk-adjusted predicted readmissions/ risk-adjusted expected readmissions

The penalties will be in effect beginning FY 2014 and will result in a one to three percent pay reduction.

Are these reductions enough to encourage hospitals to invest in changes to reduce readmissions?  Since other payers are behind Medicare in their ability to penalize, hospitals may be giving up revenue from other payers by reducing readmissions.   If a hospital avoids a readmission can they replace that admission with patients waiting for a bed?   If the bed remains empty how much variable cost can the hospital avoid?

These are factors that hospitals must consider in building a complete picture of the financial impact of readmission strategies.


Building a Complete Picture of Readmissions

May 24, 2012

This past Tuesday, our Chief Executive Officer, Seth Avery, gave a presentation at the Florida HFMA meeting about hospital readmissions.

Just in case you couldn’t make it or you want to be able to reference back to the presentation, we are posting it below.

Readmissions Presentation


AppRev’s response to the ICD-10 delay

April 13, 2012

 There have been a lot of questions regarding the announcement from the U.S. Department of Health & Human Services about ICD-10.  We at AppRev would like to take this time to address the issue and look at what we believe should continue to be the focus of your hospital’s attention.

We at AppRev would like to reassure all of our customers that we will continue to work toward the goal of ICD-10 implementation, despite the delay.

We believe that it is in the best interest of the hospitals to continue to focus on the education of physicians, coders, and other support staff. This will ensure quality documentation through the implementation process and beyond.  Solid, quality documentation and coding can only assist hospitals in capturing the true acuity of their patients, and it is never too early to begin that process.   The  change in time frame should not derail any attempts by a hospital to develop and/or proceed with current quality improvement processes.

Time and additional resources will continue to be a priority to make sure that a hospital’s IT will be ready for a full implementation of ICD-10.  We often think of this implementation as a purely coding and billing function, but often there are many departments in a hospital that currently utilize ICD-9 codes for statistics and reporting.  These departments need to make sure that they too are ready for this change and not wait simply because of the delay.

And finally, one last area that hospitals should be aware of is the financial impact that ICD-10 will have to a hospital’s case mix and reimbursement.  When MS-DRG’s began in 2007, we all heard that it would be revenue neutral to CMS although individual hospitals would see some shifting in their case mix and reimbursement.  There were hospitals that won and those that lost in the MS-DRG transition.  Knowing this, hospitals should make part of their action plan for ICD-10 implementation to know what their risk areas are and how to prepare or possibly prevent them.

AppRev is still committed to helping our clients make their transition to ICD-10 regardless of the change to CMS’ time frame. For more information about our approach to the transformation visit our website. 


Client Spotlight: Catawba Valley Medical Center

March 15, 2012

 Our newest Pricing Analytics client, Catawba Valley Medical Center (CVMC) was recently ranked among 2011 Top Performing Hospitals in Premier healthcare alliance’s national QUEST collaborative.

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 QUEST is a partnership of more than 290 hospitals national wide who are committed to “measuring, comparing and scaling innovative solutions for the complex task of caring for patients” (Premier).

 QUEST supports hospitals in providing the best care through the exchange of ideas and strategies.  According to a press release, in the past 30 months QUEST members have saved 25,235 lives and reduced healthcare spending by $2.85 billion through the delivery of high-quality, evidence-based care to 63,094 patients.

Catawba Valley Medical Center will receive an award for its performance in the following:

  • Increasing delivery of recommended based care
  • Saving lives (reducing avoidable mortalities)
  • Safely reducing the cost for care

 

AppRev congratulations Catawba Valley Medical Center for this award! 


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