From 3M Health Information Systems
Closing the coding and documentation denial gap
Reducing denials is a top priority for every health care organization and revenue cycle department. The ultimate goal is to somehow create a process that eliminates the need to review a claim that has already gone through the billing system and determine why it was denied or not paid. This takes time and resources, both of which are in short supply these days. In fact, a recent article posted on the Revenue Cycle Intelligence references “the average [denial] rate increased by 23 percent in 2020 compared to four years ago,” a number made even worse by the COVID-19 pandemic. This is especially alarming as many health care organizations are working with lean teams; they don’t have the luxury of auditing and reviewing every patient claim for perfection.
Recently, 3M participated with the National Association of Healthcare Revenue Integrity (NAHRI), an organization focused on revenue integrity, and a panel of revenue cycle leaders to better understand how health care organizations could close that denial gap. Of course, it’s not as straightforward as checking boxes. Denials are triggered for many reasons, ranging from inaccurate pre-authorization processes, insufficient information or diagnosis errors, just to name a few. For the purposes of this panel, we asked participants to focus on the coding and documentation errors.
The discussion was enlightening. The panel members were knowledgeable, with a deep understanding of their role in the vast world of denials and revenue cycle. Throughout this discussion, they acknowledged some interesting facts (based on their experience):
- “Coding and documentation denials comprise less than 10 percent of denied claims.”
My thought: If you can reduce your denials, your rework or your audits by 10 percent, isn’t that worth investigating? Small percentages can add up, over time.
- “When a claim is coded incorrectly, 64 percent of the panelists say it’s identified with their claim scrubber.”
My thought: It is great that the scrubber catches potential incorrect codes, but this means rework for your revenue cycle teams. Instead, reducing the burden on coding and documentation teams by identifying errors on the front end could result in more accurate reimbursement.
- For this panel, only 7 percent of their facilities denied claims are overturned greater than 76 percent of the time.
My thought: Even though that percentage seems low, in the bigger picture, those numbers add up over the long run.
Denials are complicated. There is a reason there are dedicated teams that review denials. There is not a one-size-fits-all option, but focusing on that 10 percent of denials related to coding and documentation errors is a good start closing the denial gap. This panel of experts had great insight and understand the importance of “getting it right” the first time. They also know that focus in their area of expertise will ultimately be better for their organization and lead to less time spent fixing yesterday’s problems.
Keri Hunsaker is a marketing manager at 3M Health Information Systems.
How can health systems streamline the review process to avoid costly mistakes and rework while also reducing correction fatigue?
2 thoughts on “Closing the coding and documentation denial gap”
Would there be a lesser risk of denial if public and private insurers were held to the same standard? Did the study identify whether health systems with a greater Medicare or Medicaid population see larger volumes of denials or missed documentation? Does population wealth affect the reimbursement rate through quality of care or quality of IT infrastructure?
Megan – thank you for your insightful questions. I think it’s safe to say that there are many complicated variables that affect denials, several of which you mentioned. The panel referenced in this article did not get into that level of detail, but for your reference, here is a link to the NAHRI report to provide more context around the panel discussion as it relates to coding and documentation denials.
If you have any further questions, feel free to reach out to me directly, email@example.com.