Physicians get some help in fight against downcoding

Hospitals are developing ways to reduce the number of denied or downgraded claims, thereby benefiting their doctors.

By Cheryl Jackson, amednews staff. Aug. 27, 2001.

Looking for a way to stop the flow of some revenue out the door, a Charlotte, N.C.-based hospital network formed a special task force to pursue denied claims.

"We realized that 40% to 60% of the no-authorization denials are unjust upon investigation," said Jo Ellen Inman-Puckett, leader of Presbyterian Healthcare's 6-month-old Revenue Recovery Team of registered nurses.

The group inputs denials and codes into a database for tracking. A registered nurse investigates each denial to determine if it should be appealed.

Since February, the group has recovered about $700,000 in claims. Another $700,000 is pending appeal.

The fastest-rising excuse for denial is coding, she said. "That's a very subjective process," she added.

A manager with the hospital network came back with idea to dedicate a department to recover denied claims after attending a denial management seminar.

Before that, Inman-Puckett said, the network hospitals -- which get about 50% of its operating income from insurance companies -- had no centralized way of accounting for many different kinds of denials.

The approach Presbyterian came up with is one of the ways hospitals are trying to get more money.

Physician income and the success of such programs are often tied, Inman-Puckett said.

"If we don't get paid, they don't get paid," she said. "If an authorization is at stake and the procedure is done at our facility, then [the physician's] reimbursement is at stake, as well."

When the facilities get denials overturned, that likely means more physicians who perform procedures at the hospital also get paid more, she said.

Meanwhile, a program at the eastern region of nonprofit hospital network VHA Inc., that was designed to compare rates of claims denials and payment downgrades is expanding to other regions.

For the past three years, a group of 30 eastern Pennsylvania and New Jersey hospitals have compared data about denial rates and shared tips.

The Utilization Management Council began tracking the rates of denials when hospital leaders suspected they were rising.

"There's no question, the HMOs are holding out more," said Mark Osborn, MD, vice president of clinical affairs for VHA East Coast.

One strategy to recover denied claims has hospitals having physicians contact medical directors and further discuss those cases, said Ilene German, director of medical managed care for VHA East Coast.

"They've been extremely successful with those one-on-one, physician-to-physician conversations," she said. Participating hospitals report getting 50% to 80% of denied or downgraded claims turned over, she said.

Some hospitals are chucking contracts with companies with high denial or downgrade rates even if the reimbursement rates are decent, she said.

"You may have gotten an adequate rate, but in the long run, you weren't going to see that money because they would turn around and not pay you," German said.