No Tolerance for Technical Denials
Hospitals receive denials for various reasons. There are medical necessity denials (both inpatient and outpatient), no authorization/notification denials, and technical denials. The first and second are self-explanatory, but the third…what is a “technical” denial? Technical denials, sometimes referred to as administrative denials, are those denials that have nothing to do with a patient’s medical condition, but rather is based on a requirement or rule from the payer. Some denials considered to be technical are timely filing, overlaps, and non-covered. As with any denial, prevention is the key, so what can a hospital do to prevent these types of denials?
When a hospital submits a claim after the filing limits, set by the insurance provider, a timely filing denial is issued. Timely filing denials are 100% preventable. Back end revenue cycle staff should be very familiar with the filing limits for each payer, most are usually 120 or 180 days except for Medicare and Medicaid, these payers have a 1-year filing limit. Staff should be set up on follow up schedules every 30 days checking on all primary, secondary, and tertiary insurances. When a patient calls to give insurance that was not obtained at the time of admission for whatever reason the timely filing limits need to be confirmed prior to adding the insurance to the account. Why would a hospital add insurance to an account that is past timely filing just to be issued a denial? In these situations, the patient should be made a self-pay and given a self-pay discount. If the volume of accounts is a barrier to getting claims out in time, outsourcing should be considered. Other reasons for holding up a claim such as waiting on coding, physician dictation, or an authorization should be addressed with the responsible party and held accountable by the revenue cycle department.
A patient cannot have outpatient and inpatient services at the same time. This is called overlapping services and if billed together will be denied by CMS and other insurances. For instance, if a patient is receiving dialysis treatments from a Skilled Nursing Facility (SNF) and then is admitted to the hospital. The hospital will provide the dialysis treatments while the patient is an inpatient but cannot bill for the services because they are overlapping. To prevent a denial in this situation, the hospital should contract with the SNF or “sending” facility for payment. The sending facility is made the guarantor and billed by the hospital for payment of the overlapping services. This requires diligence by the revenue cycle department to identify the possible “sending” facilities in their service area and ensure a contract is in place for overlapping service payments.
Preexisting, investigational, components of additional procedures, and excessive units are common “non-covered” denials. These denials are preventable, but tricky because the payor and/or the patient may not be aware a service is considered non-covered by the payor prior to treatment. This is where the front-end staff needs to be alert and acting as the gatekeeper, identifying these conditions prior to services being rendered and addressing the non-coverage with the patient for payment. Once a non-covered service such as excessive units is identified, hospitals need to evaluate, trend, and educate the physicians ordering the additional units. Physician Advisors need to be comfortable in challenging their colleagues, presenting the denials to the responsible physicians and holding them accountable moving forward. Because insurance contracts, medical policies, and websites are not easy to understand, most non-covered services are brought to light after the fact at the time a denial is issued. Hospitals should take every opportunity to learn from each denial and work to put a process in place to proactively prevent future denials for the same reason from happening again.
Technical denials will continue to happen as long as the payers keep changing the rules. These types of denials are easy for an insurance company to issue because they are black and white. There is no gray area when a requirement is not met, or a rule is not followed. Therefore, processes put in place to prevent these denials need to be followed by the staff and monitored for compliance. Hospitals, to protect their revenue, must get smarter at beating the payers at their own game. No tolerance for technical denials!
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