Revenue Cycle

Four steps for a successful denial management program

Patient Financial Services Weekly Advisor, April 9, 2004

Increasing communication with payers was just one of Kathleen E. Chavanu's objectives in developing an aggressive denial management program at her facility.

Chavanu, RN, MSN, and A-CCC, is director of performance improvement, clinical resource management (CRM) and family services at Children's National Medical Center (CNMC) in Washington, DC.

Chavanu identified the following four tools which helped reduce denials at CNMC and encourages you to try them in yours:

1. Encourage a CEO-led denial management process

  • Promote interdepartmental collaboration. It can be challenging, but it's a great boon to establish buy-in from your CEO. CNMC's CEO leads the organizational revenue cycle committee. Part of this committee's responsibility is to analyze and respond to denials from payers related to facility, physician, and medical management. Whenever you get senior leadership involved, you're going to see change because there's a higher level of accountability. Everyone will be responsive.

    2. Implement a strong case management program

  • Establish a denial notification process. Do you have a system in place to keep everyone in the loop? Communication is key to ensure that the information is correct and timely. For example, if you notify the physician immediately, you'll have greater leverage to reverse the denial while patient is still in the hospital.
  • Hold medical staff accountable. Physician accountability is an important piece of the puzzle. Everyone has a role in keeping the hospital profitable. At CNMC, our medical director of CRM is active in getting medical staff involved. In addition, CNMC also employs the medical staff, which creates an environment to implement change quickly.

    3. Create a denial database

  • Create profiles based on payer, reason, diagnosis, service line, and physician. Trending this data is key to identifying areas of focus. Often you will find negative payer trends, and this data is important in demonstrating outlier denial activity. In addition, the trending information is valuable feedback on areas to improve around timeliness or efficiency of care. We also correlate the data with current pathways, so we expect that if we have a pathway and are providing efficient care, we should not be receiving denials within those diagnoses. Further, we use the pathways to demonstrate our best practice patterns to the payers and help reduce denials.

    4. Enhance payer relations

  • Have a regular meeting with your top five payers to help smooth the lines of communication. It builds your relationship, which is necessary to develop collaborative initiatives. They have resources that providers and patients need, and collaboration can improve and enhance patient outcomes.
  • Develop payer profiles, including denials, length of stay, readmissions, and trending reports. It's important to track this information when working with payers to find solutions or identify outlier trends amongst the payers.

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