For the past several years, there have been many discussions and questions surrounding clinical validations denials and why clinical documentation integrity (CDI) isn’t leading the way to reimagine the process. The answer may be within the understanding of how CDI professionals fit in, who they should talk to, and why they aren’t invited to participate in the first place. Before we can really answer the question, it’s important to understand how clinical validation denials work, and, in some cases, realize that these types of denials exist. Health information professionals have been familiar with denials, recovery auditor contractors (RACs), pre-bill denials, remit denials, and much more for a long time. However, clinical validation denials are still a new concept to many. This article will help you identify:
- Why the revenue cycle team, and specifically the patient financial services (PFS) team, might not know about these types of denials.
- How CDI professionals can establish themselves as key stakeholders in the process.
- How to establish a tracking system to involve contracting and combat denials.
- Understand the different types of denials to understand the overall process of establishing a denial program.
Why the PFS Team May Not Know Clinical Validation Denials Exist
The PFS team may not know these clinical validation denials exist because the denial is a closed claim (billed and paid) 90 percent of the time versus an open claim. Many HI and CDI professionals are aware of how the revenue cycle works, which makes us an asset at assisting with clinical validation denials.
An open claim is a claim that has not been billed, or payment has not been received by the payer. Open claims of discharged patients are tracked on the discharged not final billed (DFNB) reports, of which HI professionals are very familiar with.
A closed claim is a claim that has been billed and payment has been received. Closed claims are not reflected on any billing reports since the claim is closed and there is no denial on the billing remit. When a denial is not on a billing remit and on a closed claim, it’s hard to track it from start to finish. When a written letter is received for recoupment of monies on a closed claim, the closed claim is not reopened, payment is paid, and it is not linked to the original closed claim at all. Therefore, it is extremely important to establish a tracking process internally to know your volume and eliminate these types of denials in becoming a part of the pre-bill audit process and being a forgotten issue. Tracking these denials will ensure you implement processes to mitigate your risk.
Many times, we must prioritize tasks, and clinical denials can become a secondary item on our list. Another obstacle is clinical denials are owned by a different department outside of HI/CDI. Through my experiences, by the time HI/CDI professionals get involved, their organization has been having these denials occur for some time. However, we must also understand the current environment we are working in. It is imperative for HI/CDI professionals to have a seat at the table, because clinical validation denials are the foundation of what we do. The goal is clinical relevance of a diagnosis in line with evidence-based definitions. The healthcare industry focus is moving toward embracing value-based care and quality. We should respect the role of insurance companies to advocate for their customer, the patient, and validate quality of care through appropriate diagnosing by validating evidence-base care provided and documentation through clinical validation denials. As HI/CDI professionals, we can look at this as a process improvement initiative to improve the current state of our query process, documentation, and patient outcomes.
My advice to CDI and HI professionals alike is to get involved by speaking the language of the PFS team. Initially, they may say they have a robust process for all denials—and they do for open claim denials that are denied on remits or simply denied before payment is received. When it comes to closed claim denials, however, they may not. When PFS tells you they have robust denials process, you should ask whether their process includes closed claims and denials not captured on remits. Clinical validation denials are typically on closed claims that do not generate on a remit. The denials are received through paper mailings and can go to PFS, the health information management team, or a multitude of other departments. In partnership with all the stakeholders, however, you can streamline the process, fine-tune your query process, and work on improving documentation.
How CDI Can Establish Themselves as a Key Stakeholder
CDI should establish themselves as a key stakeholder and work with PFS and others to establish a denials management process across departments. It’s a team effort, but CDI must establish themselves as subject matter experts for clinical validation denials. The core basis of CDI is clinical reviews using standard evidence-based clinical definitions that payers are also using to perform these denials. Outside of CDI partnership, it’s important to establish a single point of entry.
It is important to note that you must call each payer or third-party entity that sends these letters and request that they send all denials to the specific single point of entry. All denials are on a timeline, and you typically have 30 days to respond or it can be assumed you agree to the denial sent.
Each organization will handle things differently, but if you’re a CDI or HI leader ready to get involved in denials, you can start by reaching out to your manager or the director of revenue cycle/PFS and present any data you have to start the conversation. The goal is to start the conversation and begin to understand what the opportunities are for your organization. Add in your Medicare and Medicare Advantage biller(s) to this conversation; they are typically aware of the paper/closed claim recoupment process taking place now in your organization. Clinical validation denials come from many payers; however, the volume of these type of denials are typically greater for Medicare Advantage payers.
Identify any current challenges you are aware of during your conversations with the revenue cycle/PFS leadership and billers. Without any knowledge of the current state of the denials process, it would be impossible to manage. It is important to mention that for many contracts with payers, there is a standard clause that payers must allow the denials process to take its course, and the final agree versus disagree is established with the entity denying the claim and the institution before any monies can be requested for recoupment. However, if no one is responding in 30 days, automatic recoupment will happen. Explain this to your biller/PFS as you discuss the current state of things. If you discover monies are being requested before the completion of the denials process, or that no one reviewed the denial, please partner with your contracting team, as they can assist in eliminating this type of practice if it continues once your denials process is established and worked prior to the timelines outlined in the denial. In addition, through this discovery, if you find out there are denials at the 30-day mark, you can always request an extension. Payers and third-party entities who are working these denials are reasonable during this process and can grant an extension. Finally, if you find out some appeals were submitted, check if medical records are being sent with the appeal letter to validate its contents and who is responsible for sending that information. These are all very important things to ensure working towards success.
Identifying the top denied diagnoses is also important. The diagnosis is key to identifying trends, especially with sepsis denials and Sepsis-2 versus Sepsis-3 clinical definitions. This will assist in incorporating contracting into the overall process of success, as well. Knowing the top denied diagnoses is helpful for any process improvement and education with the CDI team and providers. The goal is never to change the clinical definitions your organization agreed to from a denial but to ensure the clinical definitions used by your organization are solid in the chart and to consider modifications in current clinical definitions. To date, sepsis is the most controversial denied diagnosis in the industry. In a recent Critical Care Medicine journal article, they are now defining sepsis as follows: “Sepsis is life-threatening organ dysfunction caused by a dysregulated host response to infection.” Ultimately, they are endorsing the Sepsis-3 clinical definition. Institutions might want to consider leading with other criteria outside of systemic inflammatory response syndrome (SIRS), such as the organ failure criteria of lactate, low systolic blood pressure, as outlined in the Critical Care Medicine journal, and using SIRS as secondary criteria.
After you meet with revenue cycle, PFS, and your billers, your next move should be to consider what other stakeholders will ensure your continued success in establishing a standard denials process for your organization. Again, CDI is your subject matter expert on clinical validation denials; however, there are many different denials for which a process is currently in place.
Think about these other stakeholders and discuss how they benefit your program. Some examples may include the coding department, health information management/release of information (ROI), and your physician adviser. In some cases, the health information management/ROI department may help by sending out the appeal letters and accompanying medical records; in others, PFS leads this process. Your physician adviser can likely assist in some appeal levels, such as peer-to-peer discussions.
Contracting, Tracking, and Trending
Tracking and trending is the key to your success, not only for provider education and CDI process improvement but also for connecting with your contracting team.
The contracting team has a payer representative that they work with consistently. This means they can bring up concerns with the payer representative to fight back on challenges in the process, such as which sepsis clinical definition is being used.
It is a payer’s right to audit your charts and ensure you are providing quality care and doing the right thing. However, keep in mind that everything is centered around documentation. Work with your providers to create high-quality documentation that reflects their medical decision-making as the treating provider.
As you consider your tracking and trending process, consider adding the following data elements:
1. Denied diagnoses
2. Levels of appeal (first, second, and third)
Most payers will have three levels of appeal; some will have four. When you receive a denial, your goal should always be to identify what levels of appeal are required. Here are two examples:
One payer example (Medicare Advantage) (reviewed by a third-party auditor)
- Level One: Written letter of appeal is required to entity denying the claim.
- Level Two: Peer-to-peer (physician to physician) can be requested in writing and must be scheduled. Peer-to-peer is physician to physician conversation, but the organization can invite anyone they want to attend, as it is typically a conference call.
- Level Three: The payer medical director.
Second Payer example (Medi-Cal/Medicaid)
- Level One: Written letter.
- Level Two: Second written letter back to entity denying the claim. If you wish to request a peer-to-peer, this must be stated in this written letter.
- Level Three: Peer-to-peer requested in Level Two written appeal.
- Level Four: Back to medical director of payer, if reviewed by third party entity.
3. Letter receipt
4. Type of denial
6. Third-party entity reviewing the claim
7. Financial impact
Types of Denials
In summary, it is important to discuss the type of denials and provide definitions. When discussing denials in your institution, it’s important to provide definitions to ensure everyone is on the same page. Setting definitions facilitates the conversation and may bring certain things to light that otherwise may have missed.
- Medical necessity: The diagnosis reported for the procedure performed is not valid. For utilization review departments, medical necessity can mean denial of a specific day for an inpatient encounter.
- MS-DRG coding denial: The entity believes they have identified a coding error that impacts the DRG assignment, either through the Official Guidelines for Coding and Reporting or Coding Clinic guidance typically. It is important to note that a denial can start out as a MS-DRG coding denial and can shift to clinical validation denial after the initial appeal is written, or vice versa.
- Technical denial: The claim has been rejected for technical, non-medical reasons, such as medical records requested weren’t submitted or pre-authorization was required and not obtained in a timely manner.
- Outpatient claims denial: This type of denial can occur for a multitude of reasons, such as incorrect usage or missing modifier. Medically unlikely edits (MUE), non-covered services are used by the Medicare Administrative Contractors (MAC).
- Clinical validation denial: Denial of a diagnosis due to lack of clinical evidence in the chart in line with an evidence-based clinical definition.
I hope you find the information in this article insightful and helpful to establish your CDI department in the denials process. It is truly a hidden treasure, and when we crack the code, success awaits us.
Part of this article was originally published in the July 12, 2021, edition of the CDI Leadership Insider, a publication of the ACDIS Leadership Council.
If you are starting your denials program, you can find additional resources here:
Shirlivia Parker (email@example.com) is an AHIMA Approved ICD-10-CM/PCS Trainer and vice president of compliance and education at Medovent Solutions.