Industry experts share advice to revenue cycle leaders on fighting rejections including closing gaps in the average revenue cycle and understanding motivation criteria.
Health systems have made avoiding and managing denials a top priority, but for many, their best efforts so far haven’t turned things around. The quest to bypass rejections and protect revenue has gained urgency as hospitals continue to grapple with the financial impact of the COVID-19 pandemic.
In fact, hospitals and health systems are experiencing some of the Worst profit margins since the start of the COVID-19 pandemicThis puts 2022 on track to become the worst financial year for the healthcare sector since the crisis first began.
With budget cuts and staff shortages putting pressure on revenue cycle leaders, rejection management solutions can feel out of reach. But with knowledge, data analytics, and structured strategy, organizations can tackle problems at their root and reduce rejections.
The average rejection rate increased 23% from 2016 to 2020, according to 2021 Change Healthcare Report. Even after the outbreak of the pandemic, denial continued to rise—particularly in the areas hardest hit by the first wave. However, 86% of denials are avoidable, according to the report.
As previously reported by HealthLeadersThe refusal rate has risen steadily over the past few years, and for one-third of hospitals, their average refusal rate was more than 10%.
At the time of that study, the average national rejection rate was between 6% and 13%, but many organizations were approaching what Harmony Healthcare called a “risk zone” of 10% higher.
According to this survey, 33% of hospital executives report average denial rates of over 10%, and 32% of survey respondents report that their greatest concern is coding.
Additionally, pandemic-related changes to rules and personnel have added fuel to the fire.
The rise in denials is not surprising given the increasing complexity of payment rules, said Monica Dubois, RHIA, vice president of token solutions technology at DeliverHealth in Atlanta. Hemp.
“Everything exploded in 2020,” Dubois says. “There have been a lot of rules changing, and now we’re just starting to see some of that rejection come true.”
So, what are some of the biggest weaknesses of denial?
Experts agree that most current denial targets are characterized by familiar coding diagnoses: sepsis, malnutrition, acute kidney injury, acute tubular necrosis, and respiratory diagnoses. Most of these diagnoses are based on clinical criteria, and there may be differences in the criteria used by providers, payers, and third-party reviewers, Melissa Rodriguez, CCDS, CDIP, CCS, CCS-P, CHRI, CPMA, Director of Clinical Rejection Solutions at Enjoin said. Hemp.
Payers take a close look at any claim related to a diagnosis related to respiratory, sepsis, or COVID-19. More than 25% of audits are related to these diagnoses, according to Dawn Crump, MA, SSBB, CHC, senior consultant for revenue cycle solutions with MRO Solutions in Norristown, Pennsylvania.
Working with CDI managers and coding to educate employees and provide more education about these diagnoses will only improve organizations’ reimbursement rate.
Also, organizations should still keep a close eye on COVID-19 denials, particularly from commercial payers.
Commercial payers may have specific coding guidelines, for example, that differ from CMS guidelines. If an organization doesn’t take this into account and programmers aren’t trained in these payer rules, rejections start to pile up, Dubois says.
Amanda Norris is the revenue cycle editor at HealthLeaders.
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