Role of HIM in Denial Management
By Kim Murphy-Abdouch, RHIA, MPH, CHE

Last quarter in the article entitled "How to Capitalize Opportunities" I committed to writing another TxHIMA Journal article on the role that Health Information Management (HIM)/Medical Record Department plays in the revenue cycle of a hospital. Denial Management is one ofthe many areas in which HIM can make a key contribution to the bottom line of your hospital.

Delaying and denying your hospital's claims is money in the bank for a payer. Healthcare industry experts estimate that denials and underpayments for claims can represent 2-8% of a hospital's net patient revenue. It is further estimated that 90% of denials can be prevented, and that 50-70% of denials that do occur can be recovered through an effective appeals process.

You may be asking yourself, "How do these denials occur?" There are two basic categories of denials - clinical and technical. Clinical denials result from lack of pre-certification or length of stay authorization and lack of documented medical necessity. Technical denials occur due to inaccurate or incomplete patient demographic data, incorrect insurance information, invalid code assignment, improper modifiers and discharge disposition discrepancies.

The most common approach to denial management is for the Business Office clerks to follow up on denied or partially denied claims. The typical response is for the clerk to obtain a copy of the patient's record from HIM and then send the entire record to the payer for appeal. Under this approach, more information than necessary may be sent to the payer, and HIM may not make the copies timely because they do not consider making copies for the Business Office a priority. As a result, the hospital may have an unfocused and/or untimely appeal.

The most effective response to denials is preventing them from occurring in the first place. This requires accurate patient registration, good clinical documentation, timely case management communication and accurate coding. Patient Access/Patient Admitting should ensure collection of accurate patient demographic and insurance information at the time of registration. Case Management must provide the appropriate clinical information to obtain length of stay authorization, HIM must ensure accurate and timely coding, and the Business Office must ensure that the clean claims are sent to the payers.

When denials do occur, appeals should be managed through collaboration among Patient Access/ Admitting, Case Management, HIM and the Business Office as a Denial Management Team. Denials should be analyzed and categorized to identify the most frequent sources and types of denials. If denials are occurring due to improper patient identification or lack of insurance coverage, the Denial Management Team should look to Patient Access/ Admitting for follow up on collection of correct patient demographic and insurance information and up front insurance verification. If denials are occurring due to coding, HIM should assess coding accuracy and document the correct coding data. HIM should assist in writing the appeal letters to address denials with coding questions. HIM can also be instrumental in copying and highlighting the specific components of the medical record required to document medical necessity. By identifying the specific medical information needed to address the denial, HIM can ensure that minimum necessary information is sent to the payer.

By working together with Patient Access/Admitting, Case Management and the Business Office, HIM can more effectively manage the department's resources and positively impact the cash flow for your hospital.

Kim is Vice President and Principal of MPA Consulting, Inc. She has her BA in Health Information Administration from the College of St. Scholastica, and her Masters in Public Health from the University of Michigan. She is an RHIA and is board certified in healthcare administration, achieving Diplomate status in the American College of Healthcare Executives.