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  • Writer's pictureby Pedro Oliveira

How to decrease denial rates and save time and money in the process

Updated: Oct 13, 2020

By Pedro Oliveira, Head of Delivery Services at EFFY Healthcare

Denials… They are lot alike that chronic low back pain, difficult to heal, no one likes and far too often instead of committing to getting better, which takes discipline and consistency, one ends up “toughing it out”. And when you finally seem to get better, it returns, sometimes harder than before.

What to do? Obviously, prevention is key, proper rest, eating well and in case of injury seek the right professional help that along with self-commitment will enable recovery.

The same happens with hospital leaders and denials. We could speak about most of the challenges but one key challenge that hospital leaders struggle to overcome is claim denials based on procedure authorizations, or the lack of them. These denials occur primarily when there is a deviation in the plan of care that may be caused to a patient health status change, or bad reaction to the treatment, and they burden clinical and operational teams to secure authorizations.

Too often, these approvals are not processed with the payer for a variety of reasons. Lack of communication between clinical and the administrative staff that secures authorizations and the high volume of accounts that makes it very hard to manually detect procedures changes (or even authorization termed scenarios), to name a few.

While the screens on the existing overall operating system register the charges that would drop on the claim, the system fails to confirm payer authorization - which is often not forthcoming, or when it does it is already too late since the time to fill a retro authorization already passed.

Subsequently, the claims are denied, even though the care was rendered and the expense incurred - which leads to a write-off for the hospital system. In the end, documenting medical necessity to ensure reimbursement lifts the burdens of claim denials that result from documentation failure.

The Struggle to Find a Solution

In an effort to resolve these issues, hospital leaders responsible for revenue cycle go through the arduous, sometimes confusing, process of evaluating several vendor solutions - all of them making the same claims to deliver results. The financial downside of this process is that most hospitals have already invested significant funds in an overall operating management system (OS) and analytic tools, and executives do not want to risk discarding the OS and replacing it with a different and equally expensive transaction-based model.

While multiple vendors tout their product offerings, many on the market fall short of meeting needs and expectations.

Just like when handling with chronic low back pain, you may not be seeking the right professional help and you may be tempted to endure and hope that after a few days’ it will go away.

Ideally, hospital executives should seek a Revenue Cycle Management (RCM) optimization tool that can effectively address challenges specifically related to the struggles like denials management, appeals and Medicare local market and national determination rules. The goal, of course, is to ensure clinical and operational excellence while supporting the financial viability of the organization.

Effy, a Powerful, Cost-Effective Fix

Our platform, powered by RAID Healthcare, fine-tunes the existing Operational or transactional systems, and eliminates the need to replace any existing system, even if that system is not ideal. Costs are reduced because Effy’s end-to-end software platform - used worldwide by leading healthcare systems, telecom companies, utilities, retail and other complex industries - costs less than a replacement system and is more powerful.  

Furthermore, there are no disruption costs related to adapting to new processes, which can take months for a full system conversion. Even after completion, disruption is magnified by delays associated with playing “catch up” and making corrections.

By simply overlaying Effy’s auditing solution and actionable analytics powered by RAID Healthcare, managers can quickly gain control by aggregating data from several systems, and detecting/resolving issues that impact revenue integrity, as well as clinical and operational performance, in a way that is the most cost-effective.

Remember prevention is key, so providing Hospital leaders with the ability to detect and prevent denial alike behaviors will contribute to solve the problem before it actually becomes a problem.

Detect Issues as They Occur

Sophisticated actionable analytics systems allow a hospital to use any data from any transactional system to set up sophisticated alarms to detect issues immediately, working as a protective 24/7 auditing and reporting ‘umbrella’ that makes data comparable.

An analyst, using a RCM solution built upon Raid Healthcare, has the reconciliation and analytical tools to rapidly respond to any alert. Instead of channeling the issue up through all of the relevant departments, which is time-consuming and demands the attention of a number of people, the analyst can simply offer an integrated workflow to guide a “fix” resolving the problem quickly and improving the bottom line. Saving time and money!

How it Works

To demonstrate how it works with an actual example, lets work with a scenario.

Patient presents itself to registration with a script for a CT scan of the abdomen without contrast.

Upon initial review, the Radiologist decides a CT with contrast is needed and updates the order. Patient has an IV line started and contrast injected. Test completed. Patient discharged.

The problem? Initial registration and authorization are for a CT without contrast, and a new test and fee are deemed necessary and completed without proper authorization. A denial is expected due to lack of authorization.

Now, let’s look at the same scenario using RAID Healthcare:

Patient presents itself to registration with a script for a CT scan of the abdomen without contrast.

Upon initial review, the Radiologist decides a CT with contrast is needed and updated the order. RAID Healthcare detects that the registered insurance authorization is for a different test than the one to be performed and triggers an alarm to prompt a staff member to update the insurance authorization. They proceed to get the authorization update.

Patient has an IV line started and contrast injected. Test completed. Patient discharged.

The charges on the bill are for a different service that the one scheduled, but they are now valid as the case has been worked in RAID and the proper authorization attached to file.

There is no revenue loss as there is no denial or delay in payment.

Overall decreasing denial rates while saving time and money!

This kind of precision medicine for your chronic revenue cycle pains is what healthcare leaders have been searching for: an RCM audit solution designed to make transactional systems smarter and cleaner, while generating significant ROI within months of implementation.


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