QUARTERLY NEWSLETTER | SUMMER 2023 – #45
An Ounce of Front-End Prevention By Wyatt Kozinski, Esq. A little over a year ago, SAC’s founder and managing partner, Joy Stephenson-Laws, authored an insightful piece entitled “Supporting Patients in Appealing Claim Denials Is Worth the Effort.” This article, highlighting the importance of appealing claim denials and aiding patients with these types of appeals, can be found on our website, sacfirm. com, for a full read. Supporting this trend is a recent report from the Kaiser Family Foundation (KFF) analyzing the 2021 transparency data released by the Centers for Medicare and Medicaid Services (CMS) on claims denials and appeals for non-group quali-
fied health plans QHPs. KFF found that in 2021, 291.6 million in-network claims were submitted to insurers, of which 48.3 million were denied, for an average in-network claims denial rate of 16.6 percent. Of these denied claims, about 14 percent were denied because the claim was for an excluded service, 8 percent due to lack of preauthorization or referral, and only about 2 percent based on medical necessity. Most plan-reported denials (77 percent) were classified as “all other reasons.” Another study, the Change Healthcare 2022 Revenue Cycle Denials Index, reported that the denial rate for both in-network and out-of-net-
work submitted claims has steadily increased over the past five years, from 9 percent in 2016 to 12 percent in 2022. According to the index’s authors, approximately 41 percent of claims denied in Q3 2021 to Q2 2022 fall into three front-end categories: R egistration/Eligibility at 22 percent Authorization/Pre-certification at 13 percent M edical Necessity at 6 percent Other common reasons for denial, i.e., Missing or Invalid Claim Data (16 percent) and Medical Coding (five percent), can often be remedied at the front-end phase of claim submission process.
Steps to Avoid Unnecessary Denials Given that 82 percent of claim denials are potentially avoidable through proper claim submission practice and methodology, it is critical that providers and their RCM teams take whatever steps they can to minimize these errors. Doing so has the potential to greatly increase reimbursement rates and enhance margins by reducing the time and cost related to appealing denied claims. It’s also worth noting that some 43 percent of these avoidable denial are not recoverable due to uncorrectable errors, such as ineligibility with an insurer on the date of service, or a service not being covered by Medicare. Providers can take immediate and tangible steps to reduce the risk of “forced error” denials by focusing on being as accurate as possible in five key areas of the claims submission process. These are: Registration/Eligibility – Ensure patient information is correct during the pre-registration and registration process – Confirm patient / service eligibility before submitting a claim – Apply business rules to examined registration data to help ensure accuracy, completeness, and consistency A uthorization / Pre-Certification – Review ordered versus. performed services against prior authorizations to ensure they track – Communicate with physician offices to have authorizations updated when applicable – Communicate with insurance companies on any change in authorization status – Record authorization verification calls – Capture digital images of authorizations – Utilize peer-to-peer meetings to align authorizations and identify any possible error or omissions – Partner for physician second-level reviews of medical necessity to be prepared for any potential denials and appeals
edical Necessity M – Ensure all clinical documentation is submitted for continued stays – Utilize peer-to-peer meetings to ensure substantiation, documentation for medical necessity to be prepared for any potential denials and appeals
– Verify there is an option for administrative days in contracts to cover extended stays due to difficult patient placement – Ensure documentation clearly explains the severity of the patient’s situation Medical Coding – Ensure accurate patient discharge admitting/discharge dates and status coding – Include documentation of patient care situation at time of admission – Ensure charge master is up to date and correct charges are being utilized Missing/Invalid Claim Data – Ensure that claims do not lack information or have billing errors, such as: payer ID missing/invalid, NPI missing or invalid, dx code invalid/not effective on date(s) of service, missing/invalid procedure code, or wrong procedure code billed for date(s) of service – Avoid duplicate denials by ensuring staff are adhering to appropriate follow-up process
Appeals and Arbitration
Appealing claim denials is a vital step for hospitals to protect their financial stability. The success of provider appeals varies widely across insurers and the types of claims appealed, but proper implementation of front-end processes can have a major impact on recovery at both the appeal and arbitration stages. Although it is unlikely that the insurer’s substantive reasons for denial will change throughout the appeals process, denied
claims with clerical errors and/or missing information can often be resolved at this phase. In any event, first-level – and sometimes second-level – appeals are often a contractual prerequisite for bringing claims to arbitration.
Another avenue available to providers is arbitration. When available, arbitration can be a relatively quick and painless avenue for recovery on claims that have otherwise reached the end of the line. However, proper implementation of front-end procedures still plays a vital role in recovery at this phase. Should a claim go to hearing, both parties will scrutinize and question every step along the way, from pre-registration to non-payment. At this point, it is more important than ever that providers properly follow front-end protocol. Recovery on an otherwise-solid claim can be hampered by unnecessary clerical errors, such as inputting incorrect patient information, medical codes, or dates of service. Stephenson, Acquisto & Colman is dedicated to working with providers to maximize recovery on denied claims. After internal appeals have been exhausted, we utilize various alternative methods of pursuit, such as negotiation, mediation, and, of course, arbitration. Our experience and relationships in the industry gives our firm the edge in pursuing every avenue of recovery for providers.
Ensuring that claims are properly handled will not only mitigate the uptick in denials over recent years, but also increase the likelihood and amount of recovery at arbitration. In other words – an ounce of front-end prevention can save providers a pound of cure at arbitration.
2023 AAHAM Legislative Day in Washington D.C. By Chuck Acquisto, Partner
The Law Offices of Stephenson, Acquisto & Colman participated in the 2023 American Association of Healthcare Administrative Management (AAHAM) Legislative Day in Washington, D.C. on May 4. SAC Managing Partner Rich Lovich, partner Chuck Acquisto, partner Marcus Morrow, attorney Ken Dusold and attorney Mallory McTarraghan attended the three-day event that took place at the Hyatt on Capitol Hill. On Wednesday, May 3, the AAHAM delegation was welcomed by AAHAM President Lori Sickelbaugh and MW Capital’s Paul Miller to the annual event. AAHAM Government Relations Chair presented an overview of the four (4) legislative bills to be discussed with the elected Congressional leaders.
Can you talk about a recent success story of yours? What was the challenge and how were you able to overcome it? This quarter’s Spotlight is on Attorney, Nesrein El-Haddad.
What is your area of expertise within SAC? My area of expertise and my favorite part of being an attorney is litigating cases in mediation, arbitration, and state and federal courts. I tend to love the nuisances of litigation especially as they relate to healthcare issues. Additionally, I love both the oral and written advocacy aspects of litigating cases.
What one piece of sage advice can you offer to our clients that can help them in the future? My advice is to document the communications that you engage in with payors because this evidence tends to be very effective when payors deny that they agreed to certain issues, including authorizations and eligibility. These four bills are:
H.R. 635 Expanding Access to Mental Health Services H.R. 197 Rural Telehealth Expansion Act
H.R. 3173 Prior Authorization/Standardize Medicare Advantage Rules H.F. 1773 The Consumer Protection for Medical Debt Collections Act
Prior to meeting with Senators and U.S. Representatives on Thursday, May 4, the AAHAM delegation heard from Senator Roger Marshall’s Health Policy Director Charlotte Pineda on S 3018: Improving Seniors’ Timely Access to Care Act. Pineda was following by Representative Andy Barr’s Legislative Assistant Megan Guiltinan on H.R. 1382: The Tabs Act. Finally, Representative Joe Courtney’s Legislative Director Maria Costigan spoke on Observation Stays.
I was recently working on a case wherein the payor claimed that the entire case was meritless and needed to be dismissed. However, after fully evaluating the case and seeking authority from the client, I presented to the payor our position by email. When the payor was resistant to my position, I discussed with him extensively our position on the phone. This conversation ended with not only the payor not moving to get the case dismissed as he had previously threatened, but he also settled the case for a high recovery for the client.
Do you have any guilty pleasure television shows, movies or other activities to tell us about? I love television shows and movies and feel like I have seen everything that Netflix and HBO have produced in the last ten years!
Do you have any hobbies or interests outside of work? My favorite new hobby is going out with my almost two-year old son. It may be cliché, but he really is a lot of fun and has brought great meaning to my life. I will not lie and say parentThe Hill representatives were followed by American Hospital Association (AHA) Director of Health Insurance & Coverage Policy Senior Associate Michelle Millerick on the topic of Fedral Managed Care Updates and Health Plans Accountability. Starting data from Millerick included:
1 7 in 10 Hospitals report an outstanding claim
from 2016
2 55 percent of hospitals and health systems
reported their oldest Medicare Advantage claim is from 2016 or older
3 50 percent of hospitals and health systems
report having more than $100 million in accounts receivable that are older than six (6) months
4 The total outstanding of unpaid claims for
772 hospitals older than six (6) months exceeds $6.4 billion
ing is easy, but it is definitely very gratifying and an experience like no other.
Do you have any charitable causes that interest you and events you have participated in recently? I have not had a lot of time and opportunity to do it lately, but I am very interested in education and working with children that fall behind in our educational system. I spent a couple of years teaching in inner city schools with Teach for America in Kansas City, Missouri, and that experience left in me a lifelong desire to help improve the educational system for all kids in our country.
Do you have family and/or pets you’d like to tell us about? Yes, I am married and have one son that is almost two-years old. I also have a German Shepherd named Lucy and two cats, Toby and Penny. Shockingly, all of our animals are good friends as we have had them all for many years.
What are your favorite foods? Colors? Other favorites? I love ice cream and french fries, and my favorite is green. 5 35 percent of hospitals and health systems
$50 million or more in foregone payments as a result of denied claims once appeals have been exhausted.
Finally, there was a session with Director of the Consumer Financial Protection Bureau Director Rohit Chopra, with concerns by AAHAM leaders expressed to Director Chopra about H.R. 1773 being damaging to the hospital industry.
After lunch, the SAC team walked up Capitol Hill to meet with their respective Senators’ and Representatives Legislative Assistants in the Hart, Russell. Dirksen, Cannon, Rayburn, Longsworth and Cannon buildings.
UPCOMING EVENTS:
October 10-12, 2023, Loews Hollywood Hotel, Los Angeles, CA Join SAC at the 2023 AAHAM ANI!
The Law Offices of Stephenson, Acquisto & Colman (SAC) are thrilled to sponsor and attend the highly anticipated 2023 AAHAM ANI (Annual National Institute). Our Managing Partner, Richard Lovich, will represent the AAHAM National Counsel, while our Partner, Chuck Acquisto, will attend on behalf of the AAHAM Tennessee Music Chapter. This event will be held from October 10-12, 2023, at the prestigious Loews Hollywood Hotel in Los Angeles, California.
The AAHAM ANI brings together PFS industry professionals to address pressing challenges and provide top-level education. Renowned speakers in revenue cycle management will kickstart the event, which features three tracks: Revenue Cycle, Leadership Engagement, and Operational. You’ll gain practical solutions, industry best practices, and networking opportunities. Attending the ANI enhances your value as a resource and equips you with real solutions to implement immediately. Don’t miss the 2023 AAHAM ANI! Visit www.aaham.org for more information and secure your spot. We look forward to seeing you there!
All articles are written by the SAC Litigation team. The SAC Litigation team includes attorneys, nurses and physicians with extensive experience in all areas of law related to healthcare matters. Additionally, SAC partners hold legal advisory positions with healthcare organizations and sit on the boards of numerous healthcare-related organizations, and monitor all outgoing SAC client marketing materials and related content.
DISCLAIMER: This newsletter is for general educational and informational purposes only. You should not act upon this information without seeking your own independent professional advice.
We would love to hear from you! If you have questions, comments or feedback, please email us at SACReview@sacfirm.com.
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