April 21, 2017

Claim Management, What Does Your Process Look Like?

By Elizabeth Deak, Supervisor, Advisory Services & Melissa Korey, Supervisor, Advisory Services

Claim Management, What Does Your Process Look Like?

Medicare and other commercial payers are putting pressure on providers’ bottom lines due to the influx of claim reviews and appeals. In 2014 alone, the Government Office of Accountability stated in its May report to congressional requesters, Medicare processed 1.2 billion fee-for-service claims. Of those 1.2 billion claims, it was reported that Medicare denied 128 million fee-for-service claims, which is 10.5% of all Medicare fee-for-service claims processed for 2014. Providers filed a total of 4,209,621 appeals, which is nearly double from 2010’s 2,603,557 appeals. What is even more pressing is the level 3 appeal for a hearing with an administrative law judge, which increased 936% (41,733 to 432,534) from 2010 to 2014. As the number of appeals continues to skyrocket, so do the wait times on appeal determinations. Administrative Law Judge (ALJ) decisions are issued well beyond the 90-day statutory deadline, and as a matter of fact, each year the decision interval has been increasing. For fiscal year (FY) 2014, it took an average of 415 days to process an ALJ appeal. In FY 2015, it took an average of 662 days to process an ALJ appeal, and in FY 2016, it took an average of 877 days. As of today, a provider could be waiting for two years just for a court date!

As the appeal process becomes more convoluted, it is important that providers implement appropriate denial management techniques to keep the cash flowing. Owners, administrators, and business office managers should be actively involved in reviewing the aging on a quarterly basis. During the review, senior level staff should be inquiring about the status of denied claims as well as the process staff is using to remediate the denials. Some questions to consider asking are: What was the reason for the denial? Is the claim correctable rather than requiring an appeal? Is it possible the claim needs to be canceled? By challenging your staff to look at all aspects of claim process, including coding and eligibility, your billers will begin to manage their claims more efficiently and effectively.

Not only do providers need to manage denied claims appropriately, it is imperative that providers also have good management techniques for claims that are put under review. As the Medicare payers become more complex, so do the documentation requirements for clinical needs, especially on high dollar claims. In this situation, providers must understand what sufficient documentation is. Sending too much documentation can cause red flags and open the door for an additional review, and too little may not support the services for which you are billing, which may result in your redetermination or appeal being denied.

If you are among the providers waiting in line for a level 3 appeal, then it is time to start assessing your denial management process and have independent consultants perform impartial claim reviews. The healthcare experts at Marcum can be your second pair of eyes to review your claim, payer denial detail, and supportive documentation, which will not only help you improve your financial performance, but will also help reduce the time your staff is spending on reworking mismanaged claims.

If you need assistance or have questions on appropriate denial management techniques for long-term care or physician practices, please contact your Marcum LLP advisor at 847-282-6300.

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