Revenue cycle management: dealing with denials Fred J. Pane

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Revenue cycle management dealing with denials

• Fred J. Pane R.Ph. Sr. Director of Pharmacy
  Affairs Premier Inc.
• Linda Pearson, RN, MBA, CCM, ACM,CPHQ Manager,
  Case Management Department H. Lee Moffitt Cancer
  Center Research Institute
• Erica Egri, MS
• Premier Management Engineer
• South Florida Baptist Hospital

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Why revenue cycle management?

• American Hospital Association
• Hospitals across the U.S. are under pressures of
  escalating debt. Uncompensated care approached
  25 billion in 2003.
• A survey of 130 hospital CFOs in 2004 revealed a
  leading financial priority to reduce accounts
  receivable (A/R) days.
• The Advisory Board Company developed a white
  paper on revenue cycle management in 2005 for
  CFOs
• Those affected
• Hospital bond ratings and cash on hand
• Capital expenditures and future building plans
• FTEs and payroll expenses

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Why revenue cycle management?

• Reducing days in A/R is tough!
• Challenges
• Self-pay and uninsured patients
• Billing errors
• Insurance underpayments
• Operational inefficiencies
• Some hospitals have placed cashiers in their EDs,
  other departments to collect co-pays before the
  patient leaves

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Revenue cycle business model
Revenuegeneration
Back-end
Claims submission
Medical records coding
Third- party follow-up
IS support
Rejectionprocessing
Paymentprocessing
Chargecapture/CDM coding
Appeals
Encounterservices provided
Contractmanagement
Scheduling/registration
Start
Patient access
Front-end
Crea
Created by Fred J. Pane R. Ph.
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We need to know ALL of our payers!

• Payer A Current MA rate
• Payer B Cost plus 10
• Payer C 75 of charges
• Payer D 70 of charges
• Payer F 65 of charges
• Payer G 80 of charges
• Payer H Current MA rate plus 5
• Payer I Medicare rate

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Ambulatory medical oncology unit payor mix
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What are the top profitable product lines?

• Percentage of total hospital profit 2005
• Inpatient-top 3
• Cardiac 18
• General Surgery 14
• Oncology 9
• Outpatient-top 2
• Radiology 26
• Oncology 14

The Advisory Board Company, Innovations Center
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Outpatient reimbursement Case managements role

• Linda Pearson, RN, MBA, CCM
• H. Lee Moffitt Cancer Center Research Institute

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Objectives

• Identify case management role as Clinical
  Business Manager
• Describe the role of case management in Medicare
  reimbursement

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Hx of Medicare

• Social Security Act
• National Health Insurance Program

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Health insurance intended for people

• Age 65 or older
• Some under age 65 with disabilities
• ESRD

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Medicare program overview
Part D Prescription Drug Benefit
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Decentralization of Medicare

• Section 1816(a)
• Section 1842(a)
• Intermediaries and carriers
• To identify your local FI or contractor go to
  www.cms.gov

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Responsibilities of carriers and FIs

• General overview
• Implement integrity and safeguards
• Oversee billing, payment and benefit functions
• Development of LMRPs / LCDs
• Medical review of claims
• Determination of medical necessity

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Advance beneficiary notice

• Notifies the beneficiary of reasons services not
  covered
• Given before services rendered
• Beneficiarys financial responsibility
• Secondary insurance
• Charity
• Appeal rights

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Advance beneficiary notice

• Beneficiary as informed consumer
• Physician / patient communication
• Treatment options
• Quality of life issues
• Active participant in healthcare decisions

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Patient appeal process

• 1. Physician orders noncovered service
• 2. ABN issued to patient
• 3. Patient signs ABN services rendered
• 4. Provider bills services with modifier
• 5. FI denies claim notifies beneficiary
• 6. Beneficiary files appeal to FI
• 7. Medical records sent to FI
• 8. Wait..

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Provider appeal process

• LCD Reconsideration Process
• Request to modify any section of existing LCD
• Must be submitted in writing and clearly state
  specific revisions
• Copies of published evidence supporting revision

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Provider appeal process

• FI has 30 days to determine if request is valid
• If valid, within 90 days of day request received,
  FI makes a final reconsideration decision
• FI must provide rationale for decision regardless
  of final determination

FI Fiscal intermediary
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LCD appeals

• The appeal process and changes to the final LCD
  is long and tedious.

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Best practice maximize outpatient reimbursement

• Revenue Improvement committee
• Members (clinical and financial)
• Identify Medicare reimbursement issues
• Identify appeals
• Billing and coding process
• Lead biller, QA coding specialist and Case
  management / Clinical business manager
• Meet weekly
• Identify noncovered charges
• Review documentation
• Recode and rebill as appropriate

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Best practice maximize outpatient reimbursement

• Pharmacy responsibility new drug
• New drug approval formulary status
• Determine drug and infusion charge
• Ensure billing codes conform with CMS rules
• Build standards into protocols and orders
• Pharmacy / radiology responsibility individual
  patient
• Identify non-covered items against LMRP
• Notify MD for ABN
• Justify non-indicated use if required for appeal

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Best practice maximize reimbursement

• Role of pharmacy / radiology
• 1. MD core team formulates patient Tx plan
• 2. Orders reviewed by pharmacy / radiology
• 3. Pharmacist / radiologist checks LCD software
  for medical necessity (Caremedic)
• 4. Order passes treatment continued
• 5. Order does not pass pharmacy / radiology
  notifies MD to obtain ABN

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Whats next ?
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Additional step in ABN process Patient Resource
Center

• Patients receiving ABN will be screened by
  Patient Resource Center pharmacist for
  eligibility to drug replacement/co-pay or full
  assistance programs

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The future of Medicare

• Changes to LCD
• Name change to Local Coverage Decision (07/01/04)
• Plan developed by Secretary to determine which
  LMRPs to adopt nationally
• Collaboration among FIs
• FLASCO / FI meetings
• Standard format for LCDs
• Overall goal to increase consistency

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Checklist for case managers

• Notify Financial Services of non-covered services
• Ensure proper CMS coding
• Update pre-printed orders and order pathways
• Check for claim denials
• Monitor rule changes
• Adopt changes into hospital processes
• Educate members of financial / clinical team
• Actively interact with LCDs and other rule
  makers

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Reimbursement questions

• How does the reimbursement change impact your
  clinical and formulary decisions?
• How do you make decisions on inpatient and
  outpatient products?
• How closely do you assess payer mix?

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Information sources

• www. accc-cancer.com
• www. cms.gov
• www.cms.hhs.gov/mmu/ (NEW)
• www. medicare.gov
• www. fda.gov
• www. cancercare.gov
• www.health.cch.com
• Co-payment assistance 800-272-9376

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Cardiac stress Medicare denials
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Project overview

• Goal to decrease the percentage of Cardiac
  Stress Test Medicare denials on outpatients and
  observation patients from 42 to 13 by June 2006
• Problem was identified through auditing of charts
  with Medicare denial charges for cardiac stress
  tests
• Project start date December 2005
• Project end date June 2006
• In 2004, SFBH lost 87,531 in total charges on
  cardiac stress tests. In 2005, total losses
  increased to 114,171
• 2 drugs denied along with test
• Cardiac Ejection Fraction
• Cardiac Motion Wall
• Team Members
• Jack Vasconcellos, Director, Operations
• Tammy Gaschler, Manager, Patient Care
  Coordination
• Erica Egri, Premier Management Engineer
• Beth Player-Tancredo, Manager, Physician
  Relations
• Milissa Sulick, Coordinator Cardiac Rehab

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Changes implemented / interventions

• Use of new cardiac stress test script with
  diagnoses that meet Medicare Medical Necessity
  per LMRP guidelines
• Physician is asked to select one of the diagnoses
  listed on script to perform the test
• Education provided to physicians and their office
  staff on financial impact of documenting
  inappropriate diagnosis on hospital
• Cardiologists and biggest offenders were target
  audience
• Offenders identified by determining who ordered
  the test through the completion of chart audits
• If a patient chart does not list the appropriate
  diagnosis for the test, chart is to be held until
  appropriate diagnosis is obtained

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Results / impact
-128,600 lost
-30,960 lost
97,640
Denotes denials of cardiac stress tests
performed on Medicare outpatients
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Statement of results

• Reduction in number of cardiac stress tests
  denied
• Savings of approximately 100,000 based on
  reimbursement due to appropriate documentation of
  diagnosis
• Reduction in re-work caused by having to re-pull
  charts with denials to investigate cause of
  denial and provide appropriate documentation for
  reimbursement
• Physician satisfaction with the use of the
  script, physicians will not receive as many calls
  from hospital staff requesting appropriate
  diagnosis to perform test

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Success factors and lessons learned

• Keys to success
• Team dynamics everyone engaged and up-to-date
• Physician willingness to use new script and
  attend education session
• Barriers to success
• Resistance to change from physicians office
  staff
• Coders goal to code charts as quickly as
  possible so bill can be dropped and hospital can
  be reimbursed
• Lessons learned
• Medicare has a very strict reimbursement policy,
  and healthcare organizations need to increase
  physicians awareness on issues related to
  denials and their impact on the financial health
  of a hospital

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Next steps

• Observation patients are currently checked for
  medical necessity
• Unit clerk/cardiac rehab not entering patients on
  schedule no way of knowing whether or not
  diagnosis meet Medicare medical necessity
• Monitor denials through the use of a dashboard to
  be reviewed on a monthly basis
• Charts with a cardiac stress test denial will be
  audited and root cause analysis will be performed
  to determine cause of denial
• Solidify projected savings
• Focus on EKG Medicare denials, since it was our
  2nd largest denial in 2005

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Q A session