Harmony Healthcare Blog

Establishing the Medicare Denial Management Process

Posted by Kris Mastrangelo on Wed, Feb 05, 2014


Edited by Kris Mastrangelo

It is common practice for facilities to receive communications from Medicare review agencies requesting proof of the provision of skilled services.  Understanding the process and managing these inquiries in a timely and detailed manner is critical in order to minimize recoupment of Medicare Revenue. 

Section 521 of the Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (BIPA) included provisions aimed at improving the Medicare fee-for-service appeals process.  Part of the provisions mandate that all second-level appeals (for both Medicare Part A and Medicare Part B), also known as reconsiderations, be conducted by Qualified Independent Contractors (QICs).

Centers for Medicare & Medicaid Services (CMS) contracts with Medicare Administrative Contractors (MACs) to assist with local claims processing and the first level appeals adjudication function.  In the state of New York, the primary Medicare Administrative Contractor is National Government Services or NGS. 

Many times the denial/appeal process starts with an Additional Development Request (ADR).

These can be triggered by items specific to the claim, such as:

  • RUG score
  • ICD-9 code billed
  • Wide spread probe

Under probe reviews, contractors may examine 20-40 claims per provider related to provider-specific problems.  Contractors also conduct widespread probe reviews (involving approximately 100 claims) when a larger problem, such as a spike in billing for a specific procedure, is identified.

Setting up systems to ensure timely, thorough and accurate responses is the key to managing the ADR and denial process.  Since timeliness is vital in dealing with denials, the first step in management is to ensure that someone is checking the electronic system daily.  The clock starts ticking the day the notice is posted on the Fiscal Intermediary Standard System or FISS.  This standard Medicare claims processing system allows providers to:

  • Access CWF/HETS to determine eligibility
  • Research coding
  • Track submitted claims
  • Enter/correct/adjust/cancel claims
  • View reports

When a claim is submitted for processing, the claim will receive a status/location:

  • P B9997 – Claim processed.
  • S XXXXX – Claim suspended.
  • R B9997 – Claim rejected - Providers should determine by reason code.  May have to resubmit (or adjust) claim, as appropriate.
  • T B9997 – Claim returned - Providers should make necessary claim corrections and resubmit.
  • D B9997 – Claim denied - Providers should determine if an appeal is needed noting that documentation must support services rendered.

It is important to read the ADR notice carefully, paying attention to dates of service and what is being requested to ensure that all documentation is gathered and submitted.  If you do not submit all of the required documentation, there is potential for total denial of the claim or an adjusted RUG score and reduced reimbursement.

Once again, timely submission is critical as missed deadlines equal denied claims. The typical timeframe for a response is 30 days to respond to an ADR and the notice will indicate the time line. 

Harmony (HHI) suggests that facilities review their current process for ADR and denials management asking the following questions:

  • Who in the Billing Office is responsible for:
    • Looking at the FISS system for denial notices and ADRs
    • Forwarding the notices to the appropriate parties such as Medical Records, MDS, Rehab Director, DON, Administrator, etc.?
  • Once the notice is received by Medical Records:
    • Who is then responsible for reviewing the details of the ADR and gathering the appropriate medical record information?
    • Who is the most appropriate team member to initially review the record for completeness?  MDS Coordinator, Director of Nursing?
    • What is this person's next step?  Send to the Therapy Director, Director of Nursing, etc. or review?
    • Who then receives the final compilation, writes a summary letter, makes the appropriate copies and submits to the requesting entity? 
  • Who is responsible to track the process to ensure timely responses from all parties required to review the medical record?
     
  • Once submitted, who then tracks the system once the package has been sent to the entity to determine successful resolution, or the need for additional appeal?   

It is not uncommon for an ADR to result in the denial of part or all of a claim.  Once an initial claim determination is made, providers have the right to appeal.  Once again timeliness is of the utmost importance in mitigating potential negative outcomes.  Harmony (HHI) is available to provide additional support and direction to assist facilities in the appeals process.   

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Tags: Denial Management

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