Guest post: Four steps for establishing a coding and documentation denials initiative

by Lynette Kramer, MA, RHIA

A contemporary denial avoidance and management program should be a cross-functional, ongoing initiative.

Follow this four-step process to get started on a coding and documentation denials initiative:

Step 1: Identify departmental owners. For each denial category determine sub-process owners (e.g., outpatient CDI, inpatient coding, inpatient CDI). These owners would comprise the denial avoidance team and would meet frequently to address root causes and process breakdowns.

Step 2: Review denial data. Review denials committee data  to determine trending information and identifypotential problem areas. It is helpful to be able to:

• Track initial denials and final denial write-offs by payer, reason, and financial consequence.  
• Track initial denials and final denial write-offs by physician, DRG, APC, and CPT®/ICD-10 codes.
• Differentiate by patient type: inpatient, emergency department (ED), observation, outpatient surgery, etc.
• Track denials by denial reason, discharge date, and denial issuance date.
• Maintain a denials database. Even the ability to perform simple filtering and the use of pivot tables can yield bountiful information.

It is helpful that business owners have competencies in data analytics and strong desktop skills (e.g., Excel pivot tables). If these skills are not already available within the coding and documentation team, you may need to train a team member or enlist external support from a revenue cycle or enterprise analyst.

Step 3: Develop a corrective action plan. Identifying a “quick hit” opportunity for the newly formed team can be helpful to gain confidence in the process and in the team’s ability to obtain results. Quick hits are those that can be impacted within 30 days of identification.

When the root cause of any denial trend has been identified, a corrective action plan should be developed. The plan should be formally documented in writing. Key plan components should include:

• Issue identification
  • Determine if the problem is a people, process, and/or technology issue
• Define what improvements must be made
  • Policy and procedure revision
  • Employee training/retraining
  • Technology fixes/enhancements
• Develop an action plan
  • Are the items reasonable?
  • Can the items be accomplished?
  • Are the items flexible?
  • Define accountability for each action item identified, including time frame for completion
• Identify the standards upon which performance will be measured
  • Are they reasonable?
  • Are they attainable?

Step 4: Establish monitoring and accountability. This includes monitoring the corrective action plan and associated denial improvements for initial denials and denial write-offs. The overall coding and documentation denials team should also be responsible for:

• Monitoring performance and  reinforcing accountability
• Communicating findings to the organization’s denial avoidance and management steering committee
• Reviewing monthly denials reports generated from the denial management database
• Advising investigation teams when to collaborate with other areas/departments to resolve high-priority issues

Editor’s note: This article originally appeared in Revenue Cycle Advisor. Kramer is a director at Prism Healthcare, Ltd., in Washington, D.C. She has more than 25 years of experience in HIM, performance improvement, and revenue cycle. Contact her at lkramer@prismhealthcare.com. Opinions expressed are those of the author and do not represent HCPro or ACDIS.