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How Orlando Health Drove Down Claims Denials

News  |  By Christopher Cheney  
   January 11, 2018

The nonprofit network reversed an upward trend in claims denials, with the month-to-month denial rate reduced to as little as 1%.

Since 2012, Orlando Health has conducted concerted efforts inside and outside the health system's revenue cycle team to decrease claims denials, which were trending above 5% on an annual average basis.

"It was a high-priority project because our denials were increasing," says Bridget Walters, corporate director of enterprise patient access.

The claims-denial prevention efforts, which are ongoing, have reduced claims denials significantly, with monthly claims-denial rates as low as 1%, she says, adding the average annual denial rate is about 4%.

Coordination and Accountability

One of the first claims-denial initiatives Orlando Health launched was the creation of a denials management team with existing staff members that focused on claims denials enterprise-wide, including the health system's seven acute-care hospitals.

Walters says the denials management team featured top-notch employees drawn from three areas at Orlando Health facilities: collectors, billers, and nurses.

"We had a total of 14 individuals on the team who were star performers in their areas," she says.

The primary focal points of the denials management team, which met on a weekly basis, was denials prevention and large-claim denials.

Once the denials management team started identifying trends, Walters says it took several systematic actions to prevent claims denials:

  • Worked with department executives to incorporate claims-denial prevention mechanisms in workflows
  • Conducted "road shows" to meet with nurses and other key staff members at the health system's hospitals and clinics to discuss claims-denial trends and collaborate on claims-denial prevention
  • Tracked claims denials as avoidable or unavoidable, then shared those categorizations with all affected areas such as coding, revenue integrity, physician practices and scheduling
  • Educated the clinical team on the medical necessity guidelines for inpatient admissions

With the health system's denials prevention effort matured and optimized, the denials management team has shrunk to seven members and meets monthly. The team is staffed with patient-access managers, who are not only continuing the claims-denial prevention activities of their predecessors but also closely supervising registration staff to prevent patient-access-related claims denials.

Educating the registration staff about the complete revenue cycle is crucially important, Walters says.

"We connect the dots so they understand the impact on the bottom line. Their work can affect the patient experience, the accounts receivable days of patient accounts, decreasing our bad debt, and reducing the cost to collect."

In addition to the denials management team, Orlando Health has been gathering together a broader array of executives and clinical staff to prevent claims denials. In 2012, these gatherings were called task force meetings, which were held as frequently as weekly. Currently, these meetings are held on a quarterly basis. "We review the dashboard of each facility to see their denials and what their top trends are in denials," Walters says.

In addition to the denials management team, the quarterly meeting features an array of interdisciplinary staff members, including:

  • Hospital CFOs
  • Corporate and facility revenue cycle staff
  • Managers from multiple departments, including case management, information technology, and rehabilitation services

Working with Payers

Thanks to this work, Orlando Health generates cleaner claims and has multiple mechanisms to hold payers accountable to process claims on a timely basis.

"We have many checks and balances for compliance, from our registration all the way through to our billing," Walters says.

One example is ensuring compliance with the Two-Midnight Rule. The Medicare regulation states patient hospital stays that span less than two midnights are generally inappropriate for categorization as an inpatient stay and payment under Medicare Part A. Some "inpatient-only" procedures qualify patients for inpatient status regardless of length of stay.

"We make sure that we educate the physicians and clinicians to understand the complete process and inpatient-only procedures," she says. "We are always making sure that documentation is getting audited."

When claims are denied, Orlando Health, which posted $2.5 billion in net patient service revenue for the fiscal year ending Sept. 30, 2016, closely examines the 835 electronic data interchange documentation from the payer. The 835 EDI provides payment and remittance advice from the payer, including billing codes.

"It takes a team effort. We will get the billing manager involved. We also have a cash receipts manager who understands the 835 inside and out, and we will bring in one of our denials experts," Walters says.

After one payer denied several emergency room visit claims, an 835 EDI review showed the payer had made a coding error, she says. Once the error was identified, the payer updated its system and reprocessed the claims.

Effective contracting forms the basis of productive and fair relationships with payers, Walters says.

For example, Orlando Health has established joint operating committees with several payers. These committees bring together Orlando Health and payer staff members for face-to-face meetings every other month to find out who is accountable for claims denials and to resolve those problems, Walters says.

The health system's representatives on the panels include patient access, patient accounting, managed care, denials management team members, a credit balance manager, and case management. Payer representatives include a director of case management, managed care, contracting officers, and analysts.

"When you sign the contracts, you need to make sure the contact mechanisms are in there. You need to have the joint operating committee meeting in there, and who is going to be present and the expectations," Walters says.

In addition to spelling out the parameters for cooperation, contracts with payers need to have provisions to compel corrective action, she says.

"Everything falls on the contract, including getting advance payments. If a payer's performance is not good, you can hit them in the pocket."

Christopher Cheney is the CMO editor at HealthLeaders.


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