Our Denial Management Process and Lessons Learned Mike Jacobson Providence Health & Services

1. Our Denial Management Process and Lessons Learned Mike Jacobson Providence Health & Services October 17, 2013

2. Confirming our direction

3. Providence Health & Services System Mission Statement As people of Providence, we reveal God’s love for all, especially the poor and the vulnerable, through our compassionate service Vision Together, we answer the call of every person we serve: Know me, care for me, ease my way.

4. Hospital Spotlight

5. Providence Health and Services 2012 At A Glance

6. Confirming our direction

7. Denial Management Goal Design a standard, accurate process to identify and collect all reimbursement, while reporting loss prevention opportunities to the correct department.

8. Denial Management Growth Cycle • How We Built Denial Management: • Needed to define what a denial actually is • Audit, audit, audit – Review all our transactions. Pre-billing edits, CCI edits, adjustments / write-offs, ERA CAS codes, paper correspondence, partial reimbursements, refund requests, etc. • Standardize reason and remark codes • Document current flows -- Appeal letters, hand-offs, reporting, account documentation, follow-up steps, policies, etc. • Redesign workflows and update P&P’s • Educate team(s) on appropriate adjustments and flows • Implement • Audit, audit, audit

9. What is a Denial? Now: Anything that is “stopping”, “slowing” or “reducing” payment. In or out of the business office control; we are responsible to identify, work and communicate Example: Pre-emptively resolving accident details; anticipating COB issues before notification/denial; medical necessity; length of stay; etc. Then: Originally, we were focusing on anything that had write off. Example: no auth, timely filing, CCI edits, etc.

10. Streamlining Workflow by Standardizing Reason Codes • Challenge:Standardizing denial reason codes from payers • Payers using different denial reasons; anywhere from 7 – 180 different denial codes being received • The teams would manually review the account to determine denial reason • Team had to change hats – flipping between different denial reasons • Process was cumbersome and difficult • Goal:To standardize this information/responses from payers, and drive processes based off that standardization. We want to direct the work to specialist on the denial management team that will work common (same) denials.

11. Streamlining Workflow by Standardizing Reason Codes – cont. • Approach: widespread review of all responses from payers, whether through electronic posting or manual cash posting • Created “denial crosswalk;” Taking all reason codes from payers and translate them into OUR denial code • Example: one payer had 5 different experimental/investigational denial codes – those are normalized into ONE internal code for us • By creating a normalized response, we now had less of an issue trying to determine what was denied

12. Streamlining Workflow by Standardizing Reason Codes – cont.

13. Streamlining Workflow by Standardizing Reason Codes – cont. Now that we have a standardized response, we can drive denials in different directions: 1. Automated response to a denial – based on identified denials, we script responses versus having a person work them. (Example: no coverage, accident information, student status, etc. Even some medical necessity denials.) 2. Specialist review/respond to denial – specific denials that need interaction are driven to people who are responsible for those denials.

14. Electronic Posting's Manual Cash Posting Insurance corr. Streamlining Workflow by Standardizing Reason Codes – cont. Denial Database Med Necessity Denial – goes to UM/QM/Dr. Denial Crosswalk No Auth Denial: Goes to a specialist to audit/appeal Automated Response: Scripting letters to patients/payers

15. Electronic Statusing Functionalities • Challenge: • Our market lacks standardization in claim statusing • Prior Process: • Claims “pended or delayed” at the insurance with untimely or no communication to provider • 276 and 277 still remain inconsistent and inefficient • Staff tracing claims on the payer webpage to identify the payment status - 7 out of 10 were “claim in process” • Goal: • Automated entire claims tracing process, so the right staff person is touching only claims needing additional work

16. Electronic Statusing Functionalities – cont. You might ask “Why go looking for denials?” 1. The sooner it’s worked the sooner it’s paid 2. If resolved prior to formal denial, saving patients hassle of the denial process and from getting statements 3. Avoids multiple people touching or intervening once formal denial received from the payer

17. Electronic Statusing Functionalities – cont. • Daily extract of unpaid claims for specific payers based on predetermined criteria. • Using a scripting tool (Boston Workstation) • Enter account information into the payer website exactly like a person would • Capture the claim status information from the payer website • Uploads (note) the claim status information back into our host • When claims are in “paid status”, next follow-up date is reset to avoid further “touches”

18. Electronic Statusing Functionalities – cont. • What does this get us? • Automated claim statusing – using the computer to work for us • Reduce the need to do manual claim statusing; the team avoids working on accounts that are “in process” • By working accounts that need our intervention – we create payments, resolve accounts and avoid denials • Allows us to build a database of payer denials to track/trend • What do we need to keep an eye on? • When the payer changes their webpage, our script might error out • Need to monitor changes the payer makes to their pending/denial codes – since that is driving our account follow-up

19. Electronic Statusing Functionalities – Results!!! • One PC can trace and document 5.1 accounts per minute – versus manually at 1 account per minute. • --On average 25% required additional; 75% don’t need intervention, won’t be on a work list and we won’t send statements • Claim statusing is happening during and outside our business office hours of operation. • Accounts needing follow-up are driven to the appropriate person based on pend/denial reason. • Strengthening of our report capabilities – since account notes are scripted with the claim status information, we can query the denial reason for each payer. • Scripting tool has a 100% attendance record.

20. Efficiencies Through Alignment of Staff • Challenge: • All teams in the Business Office worked denials • Inconsistent processes, accuracy, training and education • Unintended write-off’s • Inability to accurately report losses and opportunities • Denials worked to varying degrees • Goal: • Use our tools to stratify denial work based on staff skill set and complexity of work needed • Sustainable model, not impacted by staff turnover or vacancies • Eliminate hand-offs between teams; one point of accountability; from working denial, to appeal, to writing off • Confidence that every possible dollar was being pursued adequately

21. Efficiencies Through Alignment of Staff – cont. • Because of our Denial Management structure, as well as Claim Statusing and standardization of denial responses, we are aligning the team to specialize in functions – specialists works denial types vs. a specific payer: • Efficiencies Gained By: • Grouping Denials - All “like” denials are assigned to workqueue’s • Driven to specialists • No Hand Off’s: A person specializes in a denial – they are experts in the adjusting off the account; appealing denials; and are responsible to audit denial adjustments each month • Sustainable: Each specialist is also responsible for keeping up-to-date documentation on what payers need when appealing the denial • Creates Depth: Cross-training about every 60 days so everyone is exposed to more knowledge and different types of appeals • Improves payer tracking/trending

22. Communicating Information Upstream • To registration teams – identifying areas that new authorizations are needed, processes need updating or RTE issues • To care departments – providing monthly detailed reports of services performed and dollars denied • To contracting team – shows volumes of denials by payer and payers ‘rolling up charges • To CFO’s –show how much currently denied, how much in appeal process and then how much is likely to written-off (based on appeal success by payer)

23. What Are the DM Results???

24. New Features In Production • Score denials based on scale of dollars impacted and degree of difficulty. (slide) • Payer scorecard – improve communication (slide) • Self Service Reporting – care departments have access to running and viewing their department related denials

25. In Production – Cont. Length of Stay Denial Member not eligible No Authorization Denial Low $ Return High Prudent Layperson Appeal Easy Complexity Hard

26. In Production – Cont.

27. Questions?

28. Potential • Script PEOB to payers • Further identify how Remark codes are used with the goal of scripting medical records or auto-completing requests • Partner with payers to develop improved Expand Line Item Postings – with the goal of getting line item denials. • Develop internally Line Item Adjustments – so we can attribute adjusted dollars to denied charges accurately