HFMA Presentation recap: Maricopa Integrated Health System Partners with nThrive to Create a Holistic Approach for Denials Prevention

By John Hataway, Manager, Advisory Solutions, nThrive | Posted: 07/19/2019

nThrive & Maricopa Integrated Health Systems Denial Management

At the 2019 HFMA Annual Conference held in Orlando, Fla., Kathie Kirkland, director, patient financial services at Maricopa Integrated Health System, and I co-presented on “The New Paradigm: Managing and Preventing Denials in a Clinically Driven Revenue Cycle.” Maricopa Integrated Health System, located in Phoenix, AZ, is one of the nation’s largest acute-care safety net providers.

Defining a Denial in Health Care

Critical to addressing denials is clarifying how a health care organization defines and categorizes them. At the most basic level, a denial may be defined as the refusal of an insurance company or carrier to honor a request by an individual to pay for health care services obtained from a health care professional1. While payment variances are sometimes considered denials, particularly in areas of service coverage limitations, it is critical that these two be addressed based on the true root cause of the payment reduction. The distinguishing factor between these two is the rationale behind the reduced reimbursement – a differing interpretation of contractual terms versus an intentional payment reduction due to a disagreement about the necessity of the services provided or the supporting documentation.

Medical organizations typically monitor denials from two perspectives, initial denials and final denials (write-offs). While the latter receives much of the focus of denial management programs, initial denials also offer significant opportunity due to the amount of rework they can require. Even overturned denials are a hindrance to efficiency and overall Revenue Cycle management success.

The Cause and Cost of Denials

One of the major hurdles hospitals face in managing and preventing denials is in understanding true root causes, which can be found throughout the Revenue Cycle:

  • Scheduling
  • Access to care
  • Patient solutions / Care
  • Health Information Management (HIM) & Charge Capture
  • Medical Billing / Collections

Because of this, it is critical that health care organizations involve leaders from across the Revenue Cycle, and that the efforts to reduce and prevent denials is seen as a critical organizational initiative. Without full buy-in throughout the organization, efforts will often be limited to managing the inflow rather that truly addressing the root causes – preventing the realization of financial and operational benefits tied to reducing rework. By some estimates, the cost of rework averages at about $25 per claim2 and the success rates associated with this additional effort can vary from 55 to 98%3. Rework also adds time to the reimbursement period, 14 days or more according to some studies4. Given these costs, the prevention efforts should be a key strategic focus of all health care organizations.

Successful Denial Management remains a common issue throughout the health care industry despite increasing efforts to manage and overturn their inflows. To achieve the greatest results in this area, hospitals must transition from manual and siloed denial management to solutions that support more robust denial management and prevention.

Making an Impact – Success at Maricopa

Maricopa’s leadership realized the potential opportunities associated with shifting their denial management approach to focus more on prevention and include all revenue cycle stakeholders.

“Timely identification and prevention of payer denials is a significant area of focus for Maricopa Integrated Health System. MIHS partnered with nThrive to increase usage of available technology and create a holistic approach for denial prevention.  This approach includes not only revenue cycle but departments throughout the organization that have an impact on denial avoidance,” said Kathie.

By taking a proactive approach, Maricopa implemented a rejection prevention plan to reduce denials through these key concepts:

Organizational consensus and commitment – There must be full commitment across the organization to truly implement a comprehensive solution. Inconsistent buy-in can lead to lower levels of effectiveness of any denials management program and cause additional work.

Payor management and involvement – Establish a quarterly meeting with payor representative(s) to discuss performance based on data, plans to remedy issues and plans for upcoming contracts.

Systems supporting effective tracking and management – Provide effective denials prevention technology that enables collectors to meet their cash collection goals in order to prevent missing out on reimbursement dollars.

Governance, oversight and accountability – The right tools and health information technology can provide strong ROI, but the best results require process improvement, staff teaching, and technology tied together. A comprehensive denials management program should include all three elements.

Performance evaluation and feedback – Establish benchmarks and measure them against key KPIs and metrics. No metric or KPI is meaningful by itself!

https://www.healthinsurance.org/ 1

Leveraging Data in Healthcare: Best Practices for Controlling, Analyzing, and Using Data, by Rebecca Mendoza Saltiel Busch, CRC Press, 2016, ISBN-13: 978-1-4987-5773-7 2

Leveraging Data in Healthcare: Best Practices for Controlling, Analyzing, and Using Data, by Rebecca Mendoza Saltiel Busch, CRC Press, 2016, ISBN-13: 978-1-4987-5773-7 3

https://revcycleintelligence.com/news/overcoming-the-top-challenges-of-claims-denial-management-audits 4