The standalone community hospital has been able to maintain a 8-9% operating margin against a 12.5% denials rate.
Like other hospitals and health systems, St. Tammany Health System is battling an influx of claim and prior authorization denials. However, they're doing so without the assistance of specific AI revenue cycle management solutions.
According to Sandra DiPietro, senior vice president and CFO, the Louisiana-based health system’s revenue cycle staff can sometimes spend up to half a day appealing a denied claim or prior authorization request.
St. Tammany relies on the automated tools within its EHR, which has helped with finding and resolving issues on the front end. Staff handle all appeals, prioritizing higher dollar claims.
The hospital receives some assistance with implementing processes and technology through its partnership with Ochsner Health, but largely functions as a standalone, community hospital.
“We’re diligent with getting processes and teams in place to help monitor and manage and try to address them as they arise,” DiPietro says. “We educate the staff for the issues that arise, but it’s a constant battle that we’re trying to stay on top of.”
The denials team meets every two weeks to shift through claims, identifying which ones to focus on, as well as understanding any trends and where they’re escalating.
Within the appeals process, it isn’t enough to simply identify the reason for the denial. Stacie Doyle, director of revenue cycle integrity and reimbursement, says payers don’t all use the same denial codes, and the ones they do use may not be the exact code needed.
Some payers use third party vendors to manage prior authorizations, Doyle says, and vendor guidelines are often inconsistent, such as addressing a change in procedure. For example, a third-party vendor portal may say no authorization is required when there’s a change in procedure because it’s in the appropriate code range; however, the claim is still denied by the payer for not having the exact CPT code.
“We have monthly meetings with the payers, where we foster our professional working relationships, and then we get our Managed Care contracting director involved and meet at a higher level when there are prevalent problems in certain areas to address,” DiPietro said.
Sporadic updates to payer manuals throughout the year can add further strain to providers in the appeals process. In January, the Centers for Medicare and Medicaid Services (CMS) passed the Interoperability and Prior Authorization Final Rule to alleviate the administrative burden of prior authorizations from providers.
Doyle and DiPietro describe it as a double-edged sword, in that some are still denied on the back end for medical necessity.
These efforts, combined with supplemental payment programs offered by the state, have kept St. Tammany’s operating margins between an impressive 8% and 9%. However, the 12.5% denial rate is becoming more than they can manage without technology, so they’re looking to take the next step and implement an AI RCM solution.
“We’re developing a plan for the best place to put the money because we don’t have a plethora of dollars,” DiPietro says.
The hospital had just begun looking into AI technology when the COVID-19 pandemic began and plans were put on hold. The Change Healthcare ransomware attack in February set the hospital back further; they were unable to resume sending statements until last month.
When dealing with the insurance payors and denials, it seems like we’re always one step behind, DiPietro said.
Jasmyne Ray is the revenue cycle editor at HealthLeaders.
KEY TAKEAWAYS
The hospital's operating margins have stayed between 8% and 9%, despite the lack of RCM solutions in their revenue cycle operations.
However, their 12.5% denial rate is becoming too much for staff to manage alone.
Through the efforts of its denials management team, the hospital has been vigilant with payers in the appeals process.