The Medical Group Management Association’s most recent MGMA Stat poll asked healthcare leaders, “What is the top reason for denials in your organization?”
- 42% said “prior authorization.”
- 29% said “demographic issues.”
- 7% said “timely filing.”
- Another 22% said “other,” with the most frequent responses related to:
- Coding issues (including wrong modifier and improper bundling of CPT® codes) — 23%
- Payer requirement inconsistencies — 14%
- Medical necessity requirements — 14%
- Missing information/documentation — 11%
- Coordination of benefits (COB) — 9%.
The poll was conducted Dec. 1, 2020, with 619 applicable responses.
These results are not drastically different from the results of a Sept. 26, 2019, MGMA Stat poll, which found that missing info (36%) and prior authorization (31%) represented more than two-thirds of the root causes of pending and denied claims denials and pends. A Sept. 17, 2019, MGMA Stat poll also found that 90% of healthcare leaders reported payer prior authorization requirements had increased in 2019. (Also: Read MGMA’s Jan. 21, 2020, statement on evidence of increasing prior authorization costs.)
The importance of tackling denials
At the 2020 Medical Practice Excellence Conference, Steven K. Sinclair, CPA, CMPE, chief financial officer, Graves Gilbert Clinic, Bowling Green, Ky., spoke about his role in helping the group become the only organization this year to earn MGMA Better Performer status in all four categories. (Click here to learn more about MGMA Better Performers.)
While cost management and productivity were keys to the group’s success, Sinclair pointed to elimination of denials as one of the biggest opportunities to maximize revenue. “Our goal was — and this is obviously an overstatement — to have no denials,” Sinclair said. “Denials tell you a lot about failures in your processes.”
For example, the group has about 700 authorizations a day, and the Graves Gilbert Clinic team has denials down to an average of seven per day. “We’re also trying to automate that process — we want to get it less than seven,” Sinclair added. The group has worked with a third-party vendor to take a hard look at its revenue cycle performance.
“By having someone on the outside looking at our revenue cycle, that person is incentivized to tell us all the bad news,” Sinclair said. “They’re going to tell you all the warts, which is what you need to hear.”
Sinclair cautioned that working toward this goal is not “a quick fix,” but it’s eye-opening to spend time looking at revenue cycle processes with the goal of eliminating denials. “Every aspect of your operational failure is summed up in denials. … Eliminating denials ends up maximizing cash flow,” Sinclair said. “It’s almost like finding a hidden treasure when you do that.”
Changes in reimbursable services during the COVID-19 public health emergency (PHE), along with inconsistent payer rules, were cited among the top three coding/billing changes for telehealth and telephone visits in an April 28 MGMA Stat poll, and new codes continue to pose challenges for medical practices.
CPT® code 99072 — which went into effect Sept. 8 and is intended to cover added costs for pandemic safety measures — has posed difficulty for many practices.
In the recently released 2021 Medicare Physician Fee Schedule (PFS) final rule, the Centers for Medicare & Medicaid Services (CMS) finalized 99072 as a bundled service on an interim basis with other services and payments. (Also: Read MGMA’s statement on the PFS final rule.)
Additionally, the final rule acknowledges the increased costs of certain types of PPE by reflecting supply pricing increases based upon invoices that were submitted during the comment period on the PFS rule.
- N95 respirators were added to the CMS supply database, under supply code SD344 at a median price of $2.36.
- The median price of a surgical mask (supply code SB033) was set at $0.43 on an interim basis.
“The increased cost associated with these forms of PPE will be reflected in payment for services that include these supply inputs,” the PFS final rule reads.
MGMA and other leading healthcare organizations have urged commercial payers to implement and pay for this code to compensate practices for the added costs of providing safe patient care during the PHE.
One strategy that practices can use is to place any rejected claims on hold and send them in intervals to gauge when the payer is ready to receive them.
This new code is just one of many changes that outpatient practices will need to account for leading up to Jan. 1, 2021, when new guidelines and code descriptor changes for E/M services will be enacted, particularly for office or other outpatient E/M codes (99202-99215).
- Denial Management Toolkit (MGMA member benefit)
- “Assessing denials management systems for a physician practice” (MGMA member tool)
- “Decrease costs and increase revenue by proactively avoiding denials” (MGMA Insight article)
- “The 6 fundamentals to prevent denials” (MGMA Insight article)
- “Physician revenue cycle management considerations during and beyond COVID-19” (MGMA Insight article)
- “Preparing your practice for 2021 E/M changes” (MGMA Connection)
- 2021 Physician E/M Fee Schedule Analyzer Tool (Non-facility)
- Proposed 2021 Medicare physician payment and quality reporting changes (Member-exclusive analysis)
Other strategies to minimize denials
- Medical coding audits can be an effective method of reviewing your organization’s clinical documentation and medical claims information.
- MGMA consultants encourage taking time to review claims denials and error codes to ensure that proper place of service (POS) codes for each CPT code are being applied.
- For electronic payments, or electronic remittance advice (ERA), pulling the ERA file and looking up a few accounts to verify a denial is posted accurately can build a clear picture of the group’s denials.
- Get a better understanding of the categories of your denials and probability of overturn. Hard denials, such as a noncovered service or maxed benefits, aren’t likely to change. However, some soft denials can be resolved with a quick change to a modifier or submitting the medical record to get the claim paid.
Would you like to join our polling panel to voice your opinion on important practice management topics? MGMA Stat is a national poll that addresses practice management issues, the impact of new legislation and related topics. Participation is open to all healthcare leaders. Results of other polls and information on how to participate in MGMA Stat are available at: mgma.com/stat.
This poll was conducted in collaboration with Change Healthcare.