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Tip: Hardline tactics for reducing denied claims

Patient Financial Services Weekly Advisor, January 21, 2005

The number of denied claims from Elkhart (IN) General Hospital decreased significantly in 2004 from the facility's implementation of three main measures, says HIM Director Tami Long, RHIA.

1. Using a denial database. Through this process, the reimbursement director enters denied claims culled from explanation of benefits forms and CCI edits into a database. The denial database is then e-mailed to all departments weekly. Any department that receives a denial must research the claim in question and respond back.

"The department either agrees with the denial or it can make the change to the claim so it can be rebilled," Long says. "Departments proactively work on issues and are held accountable for the denials." For example, a chargemaster update can fix a claim denied due to an inaccurate code, she says.

2. Turning away outpatient services without valid orders. When a patient presents an order for services, it must include the service requested, a diagnosis and reason for the test, and a physician's signature.

If the order does not include a signature or diagnosis, the patient is still seen, but the physician is notified in writing of the problem, and the HIM department holds the bill until the information arrives. Multiple violations result in a suspension for the physician. A physician suspended more than three times in six months loses hospital privileges.

3. Turning away patients without orders. Staff assist the patient by calling the ordering physician, who often provides the order immediately, thus allowing the patient to receive treatment. But sometimes the patient must wait until the physician sends a valid order.

"At first, we said we were going to do it, but actually turning the patient away was hard for us," Long says. Now Elkhart General refuses as many as 15-20 patients a month, mainly from its laboratory and radiology departments.

The result? A noticeable reduction in denied Medicare claims due to incomplete paperwork or invalid orders. That's enough to make the difficult patient denial process worthwhile, Long says.

"The patients turned away are often very upset with our registration staff, but [staff] try to tell them they're caught in the middle and that the physicians are required by law to provide us with a valid order," she says. "We've developed scripts for our staff to help with customer service."

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