Medical necessity denials continue to be a pain point for revenue cycle leaders, so much so that HBI members reported medical necessity as one of the top three root causes in 2016, 2017, and 2018. While denials and appeals are typically housed within the revenue cycle, there are many other teams—including clinical staff, utilization review, utilization management, and more—that should engage in prevent denials efforts. UM staff, particularly, can do the following:
Secure and Support Payer Authorizations
Although the responsibility of obtaining authorizations may vary at every organization, securing initial authorizations mainly falls to patient access staff. UM staff more often help secure authorizations for continued stays. For example, UM nurses will gather and send supporting documentation to payers to authorize additional inpatient days—helping mitigate authorization-related denials.
Ensure Appropriate Patient Status Assignment
Denials can also be driven by inappropriate patient status assignment. For example, if a patient is admitted as an inpatient but the payer believes an outpatient stay would be more appropriate, the stay will likely be denied or underpaid. UM staff should help to make sure patients are assigned the correct status by reviewing their charts to ensure documentation supports medical necessity for an inpatient stay—typically using InterQual and Milliman guidelines.
Additionally, improper inpatient admissions can also lead to a high volume of short stays, which are generally reimbursed at a lower rate. Lately, HBI has heard from several organizations that some payers are flat out denying all short stays, saying that the patient should have been in observation status rather than admitted as an inpatient. However, most organizations will appeal to prevent denials because time alone cannot dictate the level of care a patient needs, they need to look at the entire medical picture.
Coordinate Level of Care Reviews
Similar to patient status assignment, payers will often argue that a patient could have been treated at a lower level of care and deny or underpay the stay. UM staff should conduct a variety of reviews to ensure patients receive the appropriate level of care throughout their entire stay. These include pre-admission, admission, continued stay, discharge reviews, and more, which help reduce the likelihood of level of care denials and underpayments.
Support Appeal Efforts
Despite UM staff members’ best efforts to prevent denials, they may still occur, leaving an appeal as the organization’s only recourse. However, UM staff can help here, too.
Given their understanding of medical necessity criteria, UM staff should be involved in deciding whether an organization should appeal, as well as crafting the appeal itself. For instance, UM staff may conduct retrospective reviews on charts that were denied for medical necessity to determine whether documentation supports the case—and whether an appeal would likely succeed. Their knowledge of medical necessity guidelines also enables UM staff to better explain to the payer why a patient did, in fact, meet medical necessity criteria. Leveraging this expertise when writing the appeal can ultimately improve the likelihood that the denial is overturned.
By supporting authorization processes, ensuring that inpatient stays are medically necessary and that patients receive the appropriate level of care, as well as assisting with appeals, UM staff can help mitigate & prevent denials and promote appropriate reimbursement.