Volume VII Number 1

January 2001

The Newsletter of

D E K A Y E  Consulting, Inc.

231 Oakview Avenue
Oceanside, New York 11572
Phone / Fax: (516) 678-2754
E-Mail: Adkcmpa@aol.com
E-Mail: DKConsult1@aol.com
URL: http://www.dekaye.com



HAPPY NEW YEAR!

Vital Signs

CLAIMS DENIAL APPEALS PROCESS

By Jeffrey W. Shutak, CHFP, Patient Accounts Manager, The Memorial Hospital, North Conway, NH

To maximize cash flow, lower accounts receivables and reduce days in A/R, it is imperative that the Patient Accounting Manager (PAM) has a grasp on all areas that could potentially produce negative outcomes in the Patient Accounting Department.

It is equally vital that the PAM has the necessary tools at their disposal to resolve those problems should they develop. In this article I want to illustrate some problem areas that potentially could impede cash flow and offer you one or two tools to overcome those obstacles.

With the introduction of additional levels of reporting to provide "clean" claims to third party payors and the ever increasing regulatory mandates that we are experiencing in the healthcare industry, it benefits the Patient Accounting Department to minimize the number of accounts being rejected for lack of administrative documentation. This is especially important in the Managed Care arena.

In a very recent survey of over 1,000 investor-owned and not-for-profit hospitals across the country, 76.6% of the hospital executives who responded said they saw an increase in claims denials and disputed claims. Of the respondents, 45.5 % attributed the spike to payors being difficult and stalling, and 24.5 % attributed it to payors not complying with the terms of the contract. (To obtain additional information regarding this study go to: http://www.ubswarburg.com/)

One of the areas that I have found to be particularly troublesome in claims denial, is what I refer to as administrative rejections. These rejections can occur for a variety of payor stipulated rationale. The justification for these claims rejections typically focuses on two areas: " authorization not on file" and "pre certification not obtained".

Assuming that most providers have an established protocol in obtaining prior authorizations/approvals I would like to address methods in which the Patient Accounting Department can appeal third party payor denials. In conjunction with this I have provided sample letters of appeal at the conclusion of the article that have proved successful for me.

Documentation: To substantiate any denied claims appeal process it is essential that written documentation be retained on all verbal and written correspondence at all levels of the patient encounter. This is especially critical in the issuing of prior approvals/authorizations by third party payors.

To minimize research for post claims submission denials, all conversations, written and especially verbal, with payors must be documented. Often, claims are denied months or in the worse case scenario, even years after the original claims submission. Because of this wide disparity in claims adjudication, do not rely on sticky notes written on scraps of paper or worse yet, your memory for documentation.

If you should ever have to legally appeal a claim denial, precise, factual documentation is a must because an administrative law judge will review your records. To facilitate retrieval of conversations all notes should be made a part of the electronic patient record. (Using available electronic scanning software, written correspondence can now be made a part of the permanent patient record).

Documentation of conversations with payors should include at minimum, the date the conversation took place, the person you spoke to and of course, the prior authorization or treatment numbers. This documentation must also include your name or initials.

Any additional information gained from the pre authorization phone call/conversation should also be noted. This can include comments such as "this individual was just added to the contract" or "this individual was dropped from our group but has been re-instated". Written documentation of comments such as these can often be the deciding factor between a successful appeal and a denial. It is my philosophy that you can never have too much documented information. Take notes of any conversations as necessary, if applicable transfer these notes to the patient account.

Once your have the pre-approval/authorization, 99.99% of your claims should be reimbursed without question. While I have found that some third party payor contracts contain language stipulating retrospective medical review of prior authorizations is permissible and that such prior approvals can be overturned, I have never lost an appeal once a prior authorization has been granted.

The Patient/Guarantor: A satisfied patient can be your best ally. Keeping the guarantor appraised of the appeal process is critical. The patient is paying the premiums, either out of his/her own pocket or as a part of a job related benefit. Notify the patient that the claim has been denied; tell them you are appealing the denial. A satisfied patient wants the provider to be paid. Copy the patient/guarantor on correspondence related to the appeals process. If this is a contracted payer you can not bill the patient.

The Appeal Letter: Immediately after you received the claim denial, begin the appeal process. If you believe you have a compelling rationale for an appeal resulting in the denial being reversed, you need to proceed with that appeal. Granted, the appeal process is time consuming. But as time consuming and bothersome as the appeal process is to the provider, it is equally as cumbersome, if not more so, to the payor.

I have found that with minor exceptions, most appeal letters can be slightly modified to communicate all types of appeals. You do not have to re-invent the wheel every time you write an appeal letter. Go with what has worked for you in the past. Keep copies of prior letters of appeal in your computer system, modifying them to warrant whatever particular situation is at hand.

Here are some items that all appeal letters must contain:

Body of the Letter: Keep this portion of the letter focused and dealing with the facts. Remember you are right. The payor made a simple error in processing. You need to convince them to review this claim and overturn their denial based on the facts.

If there has been a recent problem with claims being denied due to the same reason, state that in your letter. As an example: "We have had four claims for MRI services denied within the past month, even though we obtained prior approval". This could indicate a problem within the payors network.

Quote contract and claims processing language.

If a payor is requesting a bill submission other then the approved UB/Contract language format try this:

If you have re-submitted the claim numerous times prior to the denial, tell the payor that. Example: "We have previously submitted this claim four times and have not heard from you".

If the claim is being denied because Medical Records have been sent and the payer is claiming they were never received put the payer on the defensive. Example:

(See additional examples of appeal letters at the conclusion of this article).

Other helpful hints:

Summary: The two most important things to remember are:

Included in each of the following letters are authentic examples of successful claims appeals. Good luck. Click on : Appeals Letter Samples and Appeal Sample Spreadsheet (in Excel).

Perspectives and Commentary

Contrasting Customer Concerns

By Allan P. DeKaye, MBA, FHFMA, President and CEO, DEKAYE Consulting, Inc.

Whether it’s at a merchant, in a department store, in Cyberspace on the Internet, or at one of our healthcare providers, customer service concerns are important from two perspectives: the customer’s and the provider’s (the term used here regardless of industry). Recently, I had the opportunity to not only view, but participate in many of these arenas–up close and personally. The results are disparate and surprising.

Up, Up and Away!

The airline industry has not been high on many customer-oriented lists. In fact, complaints about delays run rampant. As one who uses New York’s LaGuardia Airport (LGA as it is designated--and many of you who travel will feel my pain), I know that spending the night in the wrong city because of late departures and missed connections can certainly try the patience of even the most-battle tested travelers.

However, just recently, while returning from vacation (only to be met by the 12+" of snow that blanketed New York and much of the Northeast this past Christmas holiday), I know the havoc it played with returning (and departing) flights to/from the area. This did not ease my family’s pain, as we determined how and when we might return. Suffice it to say, my 20 minute wait for an airline representative at the toll-free telephone number did not bode well.

Nonetheless, we had new flights for the next day (New Year’s eve) that would return us home. But the real test did not occur until the new departure date, when we realized that for the first part of the trip we were "confirmed priority standby’s." Even I had not heard that term before. Now I learned why some people get bumped involuntarily (and in some cases get handsomely rewarded, if they have time to spare).

Despite the bargaining that went on around us, the gate agent’s acted with "grace (and patience) under fire." As you might guess, there were many weary travelers trying to get to their final destinations. What impressed me most was their ability to stay calm, work diligently and give each customer the sense that their travel plans were important.

Some year’s back, the same airline did not demonstrate the same sense of service–in fact–then it was totally missing. Again, during that holiday period, the absence of any leadership or presence prompted frustration and outrage–not to mention a "nasty letter" upon my return.

In fairness, after concluding this column, a "nice letter" will be sent to the same airline–if only to be consistent, and to recognize that good work–which should be expected--anyway, can still be acknowledged–especially under unusual and difficult circumstances.

When the Bill is Wrong!

Upon recently reviewing a family member’s bill, I, too, was struck by the inconsistency of one charge that appeared to be totally out-of-context. When I called to question it, I was told some rationale–that as you might expect–did not sit well with me. I requested an itemized bill be sent, and was assured one would be sent.

After two subsequent requests–both of which yield the same non-fulfilled request, I decided a letter was in order. Except as you might expect, mine was sent to the CEO, whom I knew. Yes, results followed immediately!

While I was correct in my sensing an error (which was latter confirmed), it was the unresponsiveness of the first, second and third call that was the most serious concern. The failure to respond to the patient inquiry was the most serious offense.

Not only does it tend to mask the good, quality care that was rendered, but it is the last thing we remember about the facility (or airline), and it may likely influence our choices in where we seek care, or ask our physician (or travel agent) to send us when care (or vacation) is again needed.

Disparate Scenarios, Similar Concerns

What do flying and healthcare have in common? Absolutely nothing–at least from a product description! However, from a customer service concern, they share the same basic tenet: "the customer is always right"–or at least they should be treated that way.

In The Patient Accounts Management Handbook (Aspen), on of my contributors notes that every phone call or patient inquiry should be treated as an error. When I asked him why, he indicated, "that we obviously failed to answer that concern (which should have been anticipated) when the patient was here!" [Editor’s Note: Chapter 20, "Fixing Your Compass: Assessing Your Current Position," by Bruce A. Hallowell.]

I’m also reminded of another client whose customer service motto was, "one call does it all," and he strived to instill that throughout the facility. It is all too often that when making inquiries, we are either shuttled between departments on the phone or in person; or receive misinformation or no information at all.

While avoiding "nasty letters" can be a goal, preventing them in the first place would be a more pro-active approach. Another client had a rule about hiring staff in the patient accounts and admitting/registration areas. She always asked candidates (and existing staff) what nice thing(s) they had done for a patient. She wasn’t necessarily looking for the volume of good deeds, but the general attitude and responsiveness of the individual to the question.

If you believe that "Life Imitates Art," then as we start the year, we need only look to our personal lives for examples of the "good" and "bad" in how we are treated in the daily marketplace. Most flight attendants announce upon landing, "that you for choosing to fly with us. We know that you have a choice when flying...." Our industry commitment to the "better side" is always in order. After all, writing nice letters can be more rewarding.

The Contributor's Corner

Home Health Care Update 2001

by Andrew B. Shulman, Manager, Holtz Rubenstein & Co., LLP

Funding for home health care must be restored. The universal opinion amongst all providers, patients and elected officials at local levels is that Congress must vigorously support and sponsor home health relief legislation. The hope in 2001 should be to build upon the gains achieved in the 106th Congress through the passage of Medicare and Medicaid legislation. In essence, all provisions would be considered positive provisions and the first real step in the reforms necessary to counteract the devastating effects that the Balanced Budget Act of 1997 had on the homecare industry.

Two of the major reforms could result in the elimination of the 15 percent on the home health benefit altogether and urging Congress to "unbundle" non-routine medical supplies from the home health PPS rates and to even eliminate consolidated billing for these supplies.

While the Medicare Restoration Package hangs in the balance and while the Office of the Inspector General evaluates the implementation of the HHA prospective payments system and how PPS is affecting Medicare beneficiaries access to homecare, your compliance plan might very well change as compliance risks change under PPS. The new ergonomics program standard, issued in November 2000, requires all home care providers to implement a costly new compliance program. Not surprisingly, many projects target various aspects of the home health prospective payments system, such as how well PPS payment controls work, whether PPS affects access to and quality of care, and the interaction of the Outcome and Assessment Information Set with the case-mix adjustment. While the coming revised Conditions of Participation should be released in March 2001, the OIG wants to know how many HHAs have compliance plans in place and the message is : If you thought a compliance plan was too costly and not worth the effort, you should think again before the Feds come calling.

    Health Care On The Web

Recent Health Care press releases:

 

Medicare

HCFA : MEDICARE INSTALLS TOLL-FREE LINES FOR PHYSICIANS AND PROVIDERS SEEKING  BILLING AND CLAIMS INFORMATION
HCFA: 2001 MEDICARE+CHOICE PAYMENT RATES ARE ONLINE
HCFA: MEDICARE ISSUES RULES FOR MEDICARE PAYMENT FOR NURSING AND ALLIED HEALTH EDUCATION AND CLINICAL PSYCHOLOGY TRAINING

Medicaid

HHS: HHS ISSUES UPPER PAYMENT LIMIT REGULATION
HHS: STATES CAN OFFER EXPANDED HEALTH COVERAGE UNDER NEW HHS MEDICAID RULE

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D E K A Y E Consulting, Inc.
231 Oakview Avenue, Oceanside, NY 11572  Phone/Fax: (516) 678-2754
URL: http://www.dekaye.com E-Mail: Adkcmpa@aol.com or DKConsult1@aol.com