Nursing homes, assisted living facilities, and other long-term care facilities rely on Medicare reimbursements for services provided to residents. In particular, Skilled Nursing Facilities (SNFs) receive reimbursements for services provided under the Patient-Driven Payment Model. Denial management is the process of identifying and managing the denial of claims in the long-term care reimbursement process.
In order to receive reimbursement for services provided, long-term care providers must submit accurate and complete claims forms to Medicare. Claims must include information about the service provided, the patient’s insurance coverage, and the provider’s billing information. For facility leaders who want to ensure best practices during denial management, they must first ensure that their nursing home staff—such as MDS nurses—understand soft and hard denials:
- Soft Denials: These types of denials are usually caused by errors in the claims process, such as incorrect codes, incomplete documentation, or insufficient medical necessity.
- Hard Denials: These denials occur when Medicare or private insurers do not cover a service or when services have been billed incorrectly.
As for the five most common types of denials, these are:
- Eligibility Denials: These are the most insidious type of denials, and thankfully, often the easiest to overcome by observing excellent denial management practices. These particular denials occur when either the patient doesn’t have coverage, an external provider has a certification lapse, or a facility has a certification lapse.
- Medical Necessity Denials (Clinical Reasoning Denials): These are some of the hardest denials to get a meaningful return from, as they require a fully enabled Utilization Management team to manage the denial. These are denials where the payor feels that the charges are unreasonable or the length of stay went beyond reasonable and customary stays. Therefore, these denials typically involve a clinical appeal and significant labor costs.
- Authorization Denials: These can be avoided with proper denial management as well, as they are due to a lack of pre-authorization, which is a relatively common requirement from many payors. Services that are higher cost, such as imaging, implants, and certain advanced radio-surgical techniques, require a provider to get permission from a payor before providing the service and seeking reimbursement. The good news is that these are almost always spelled out in the payor rules manuals.
- Billing Denials: These “technical denials” are often caused by human errors rather than technology and typically include missing guarantor numbers, misspelled names, and missing occurrence fields. However, no long-term care facility can eliminate such errors completely. But it is best to make use of senior care software to help minimize this.
- Coding Denials: These are the result of errors that come from a claim that was coded incorrectly. The issue must be corrected in the documentation before re-submitting a claim. Coding errors can arise in different areas, but the result is an inefficient use of resources and a potential loss of revenue.
Thus, in order to avoid claims denials, it is essential for long-term care providers to have a comprehensive denial management strategy and process in place. In the next section, we will discuss the best practices for denial management.
How To Best Manage Claims Denials
Above we mentioned five common types of denials that long-term care facilities encounter in their operations. To avoid their facilities from having multiple claims denials that can lead to a decrease in revenue caregivers should have a denial management process in place to ensure that denial claims are handled quickly and efficiently, as we will discuss below.
Understand the cause of your denials
By understanding the cause of a denial, long-term care facilities can address the issue and prevent it from happening again. These denial reasons include:
- Duplicate billing
- Upcoding (using a higher-paying code on a claim to receive a higher reimbursement)
- Unbundling (itemizing a bill for tests or procedures that are typically billed together to increase reimbursement)
- Coverage termination
- Prior authorization before delivery of service is required
Create a workflow and a team for the denial management process
A solid denial management process ensures that denial claims are handled quickly and efficiently. By having a team in place, the facility can designate individuals specifically for addressing denial claims and resolving them. Doing so allows for a more streamlined and organized process, which can help a facility avoid any further claims denials. It also guarantees all steps are followed so denials are resolved as quickly as possible. This can help to avoid any further delays in reimbursement and ensure that the facility is getting paid for the services that they have provided.
File your appeals within a week
Long-term care facilities should file their appeals as soon as possible and, ideally, within one week of denial to ensure that the denial is addressed quickly. This also gives the facility time to collect any additional documentation if needed for the appeal process.
Monitor the progress of your appeal
To ensure that denied claims are handled in a timely and efficient manner, long-term care facilities should track the denial claim from the time it is received to the time it is resolved. By doing so, the facility can stay updated on the status of the denial and ensure that all steps are being taken to resolve it as quickly as possible. Additionally, this allows for better communication between the denial management team and other departments within the organization.
Maintain accurate and up-to-date records throughout the appeals process
By keeping track of all the relevant information, long-term care facilities can provide the necessary documentation to support their appeal. This can help to speed up the appeals process and increase the chances of a favorable outcome. Additionally, having accurate records can help to avoid any delays or confusion during the appeals process.
Adopt denial management software for your facility
Denial management software has a part to play in ensuring facilities prevent any claims denials and successfully appeal any denied claims. In the next section, we will dive deeper into the role denial management software plays in long-term care facilities
Contact us here if you would like to use our long-term care software to increase your reimbursements.
The Role of Denial Management Software in Senior Living
By having a denial management software system that tracks and collects all relevant information, a denial management team can rest assured that they have everything they need to support their appeal. An example of such denial management in healthcare is Revenue Cycle Management (RCM) software. We previously mentioned the five most common types of denials. Let’s now look at how this software can be used to minimize those particular claims denials:
- Eligibility Denials: Your RCM makes it easy to get out in front of these with integrated eligibility checking and a user-friendly interface by which credentialing can be tracked.
- Medical Necessity Denials (Clinical Reasoning Denials): The denial management software should provide tools to help track utilization management efforts and build rules around problem claims.
- Authorization Denials: The nursing home software should provide a rules engine that can help you trigger an alert when attempting to schedule unauthorized procedures so that you can stop these denials in their tracks.
- Billing Denials: Rules and processes can help reduce claim denials in medical billing. These are generally caught and corrected in a “claims scrubber,” which is generally included in an RCM.
- Coding Denials: Your RCM provides effective workflow management tools, such as queues and utilization management worksheets, that help staff understand the technology and ensures it does not inhibit their processes. This is why it is always best to demo the software before making a commitment.
Overall, denial management software can be a valuable tool for long-term care facilities looking to resolve denial claims. By having an elder care software system in place that is specifically designed to handle denied claims in long-term care, the facility can streamline its process and ensure that all steps are being taken to get the denial resolved as quickly as possible.
Challenges in Long-term Care Denial Management
Before we conclude, it is worth mentioning some challenges that long-term care facilities may face when it comes to denial management. The biggest challenge would be the lack of appropriately trained staff in denial management. According to research, 30% to 40% of denied claims are the result of registration and pre-admission errors.
Another challenge that facilities would face is the high cost of RCM software and other related elder care software. The initial cost of implementing denial management software can be quite high, and there are ongoing costs associated with maintaining the system that may be too much for some facilities. Therefore, it is important for leadership to explore the related costs before implementing any new management software programs.
The denial management process is an important part of any long-term care organization. By having a system in place to help collect and track information as well as keep all documents organized, nursing home teams can focus on preventing claims denials and getting their denied claims resolved quickly.