Reduce Your Denials

In my previous two columns (March 2014 and June 2014), I recommended a variety of key metrics and processes that DME managers can use to keep up with the ever-increasing demands placed on their documentation and reimbursement staff. This month I will provide some recommendations on actions you can take when various metrics are outside the comfort zone or processes appear to be breaking down. As experienced quality assurance managers know, it’s impossible to effectively tackle more than two or three performance improvement projects at a time. So, your first step is to analyze the various opportunities for improvement within your business and then prioritize them. Once you’ve decided which projects will provide the most bang for the buck, it’s time to take action. Let’s look at a few examples. Reducing the sheer number of denials can reap major rewards for any company. Not only will it improve cash flow and reduce DSO, but also it will free up labor to focus on future projects. Start by running a report that lists all denials received by the company in a specific time frame, such as the last one to two months. Exporting to a spreadsheet is best if your software offers this feature because you will be able to sort the data. For our purposes here it makes no difference if the denial has been worked or whether it is outstanding—what we’re trying track is the cause of the highest volume of denials overall. Now, sort the data to determine totals for each specific denial code. Running a pivot table on the data makes this easy. Next, add a column to the spreadsheet to categorize the denial. For instance, “wrong payer” and “insurance termed” denials would each be categorized as an insurance verification issue. Various denial codes that all relate to the payer asking for additional documentation would be categorized together as well. Once you’ve determined the categories that make up the largest number of denials, take a look at some specific examples in the patient accounts. Once you find a pattern by product or payer you can develop a process to reduce all the denials in that category. The solution often turns out to be simple. Maybe you need to revise your insurance verification​ form, retrain staff on proper modifiers for certain products or proactively send the detailed written order to certain payers with the first claim on a rental product. Medicare audit tracking is another project that should be ongoing and can help drastically reduce the number of failed audits a company experiences in the future. Track the patient name, the product being audited, the physician who referred the patient, the Medicare request date, your response date and a reasonable date to follow up on the results of the audit (45-60 days). If you failed the audit, record the exact reason for the failure in the final column of your spreadsheet. The management and billing teams can review the results together. It’s very likely you will find a pattern that can be easily corrected with a simple process change or employee retraining. Sometimes your management review may lead you to conclude that you just don’t have enough staff to keep up with the ever-increasing demands of insurance payers, but your margins are so slim you have no idea how you can afford to add additional staff members. Keep in mind that very specific tasks can now be effectively outsourced overseas at 25-35 percent the cost of labor in the United States. DME-specific business process outsourcing companies can make your patient calls, download compliance reports for PAP patients, obtain prior authorizations from payers, complete insurance verification, track the receipt of shipped supplies for proof of delivery purposes and more. Remember, no company can solve every challenge they face in one day. But as long as you take steps in the right direction every day, you will eventually succeed.