February 13, 2019

How to Combat Increasing Commercial Payer Denials

Commercial payer scrutiny is on the rise and handling denials is costly and time-consuming. Hospitals track denials in their dashboard metrics, and the slightest increase in the denial rate can set off alarm bells in the C-Suite.

With pressure to reduce denials, the easiest response might be to err on the side of caution. After all, when a patient is not obviously an inpatient, keeping them in observation eliminates the risk that their case will be denied. While this approach is tempting, I have some advice for you. Stop it, right now! Look in the mirror and tell yourself, “I deserve to receive credit for the work that I do, and my patients who need inpatient care deserve to receive it.” Then follow these steps:

Ask yourself why

You must identify the root causes of denials. Start by looking for trends. Are there technical errors causing denials? Is poor documentation a major culprit? Make a list of identified items and commit to fixing them. Those problems are your opportunities. Leave no room for excuses! You might find that you need an additional resource, such as a physician advisor, to provide commercial payer education and documentation training.

Confirm that you are placing patients in the appropriate status

If your denials are legitimate admission denials (not caused by technical errors or poor documentation) this could be a red flag that patients might be erroneously staying in observation when they should be admitted instead. Do you have the resources you need to status patients appropriately? When you ask your providers how they determine a patient’s status, do they blink in confusion as if you asked them, “What color is a dog’s bark?” If so, you may need to boost your case management and physician advisor resources.

Don’t be afraid to hold your ground

I often hear statements like, “this payer wants us to keep patients in observation for the first 72 hours.” These so-called policies are rarely contractual; they get developed in response to several previous denials. If you lower the bar and stop challenging your payer colleagues, you will likely incur further pushback on patients who are appropriate for admission. Continue to do what you know is right and continue to ask “why” when presented with rules that might not make sense.

Understand your commercial payer contracts

Remember, with commercial payers, the rules of the relationship get defined in your contract. So when you hear, “this payer wants us to keep patients in observation for the first 72 hours,” you should ask, “Is there any unique language in the contract regarding status?” If not, then traditional definitions of medical necessity should apply. Try to seek out information from case management and your physician advisor when possible.

Know the rules for appeals

Are you familiar with the appeal rights for your high volume payers? If scheduling an appeal or peer-to-peer discussion feels a bit like trying to pin down your cable company for an appointment time, there may be a breach of an agreement or even regulations. If you hear something like, “Our medical director will call during a prime number minute sometime between 7:00 am and 4:00 pm and if you miss the call, we will assume you agree with the denial,” it is important to call out this unreasonable behavior. These incidents should also be logged and presented at joint meetings and future negotiations.

Stay firm, but keep your cool

Sometimes situations will tempt your patience. Take a deep breath and remember that the insurer may not have all the information or understand the full situation. They are trying to do their job which includes limiting inappropriate utilization. Being polite and professional is your best bet for a good outcome. Once you make it personal, the chances for a good outcome diminish. Weak knees and sweaty palms are ok over the phone, but try and bring on your confident voice. Be familiar with the case and the patient’s unique circumstances before you call or receive a call.

Don’t let the payer dictate who takes the call

I have been seeing a trend where payers are refusing to hold peer-to-peers with physician advisors or other trained individuals who are not the attending of record. When a case gets denied, the initial process has failed, and expert support is warranted to ensure that the patient can receive care in the most appropriate status. Refusing to speak to hospital representatives is counterproductive and potentially disingenuous. If your payers refuse to talk to your advisors or your other representatives, escalate the issue and bring it up at the next contract negotiation. If the practice continues, have your advisors work with your clinical teams and consider joint calls. I strongly recommend against having frontline providers handle appeals without adequate training. In worst case scenarios, we have seen attempts by payers to “educate” providers with concepts that run counter to traditional medical necessity definitions.

Bring in trained and experienced support

How do you handle appeals? Do you rely on a busy clinician who has not been trained to handle peer-to-peer discussions? How often does this person connect with the insurance medical director? When they do connect, what is the outcome? Peer-to-peer discussions are too important to be left to chance. A trained physician advisor can likely yield far better results and help to identify and address trends to help prevent denials. If you needed complex bypass surgery, would you go to a surgeon who performs bypass for 1% of their cases, or a specialist that focuses heavily and performs a high volume of bypass surgeries? Familiarity with the process, rules, and expectations is critical for reducing denials.

Consider regular joint operating meetings

Establish a regular dialogue with payers to foster a healthy, productive relationship and to keep discussions honest. Systems that have regular joint operating committees (JOCs) often find they have more in common with payers than they thought. Consider tackling common problems first such as improving performance on quality metrics and reducing readmissions.

Get educated on how to articulate medical necessity

Unfortunately, during medical school training, no one ever sat me down to explain that documentation needed to include a justification for why I was using precious resources. I was not trained to talk about the confluence of medical and social factors that might affect which setting a patient needs to receive services. If like me, you did not receive adequate training on how to articulate medical necessity, I encourage you to seek a physician advisor for additional education and support.

Dr. Ahtaridis presented on this topic in the Sound Advisory Services webinar, Don’t Deny Me: Strategies to Reduce Commercial Payer Denials. Click here to watch the webinar.

  • Valuable insights from the payer’s perspective
  • Best practice, peer-to-peer engagement strategies
  • How to educate frontline providers to reduce denials
  • Innovative strategies to develop a collaborative relationship with payers

Subscribe to the Sound Physicians Blog

A trusted source for today's healthcare needs.