How a Payer Rules Filter Can Reduce Denials
How a Payer Rules Filter Can Reduce Denials
By Tammy McCausland
This blog post is modified from an article that appeared in Radiation Oncology News for Administrators Vol 32 No 5.
Denial are complex, time consuming, costly to rectify and increasing yearly.
Payers complicate the billing process by creating their own rules. And now they’re using artificial intelligence (AI) tools to deny more claims.1
“Payers have a set of guidelines that they’ve created and follow. They’ll pull pieces of policies from the Centers for Medicare and Medicaid Services (CMS) or an Office of the Inspector General report and apply them, but they’re not necessarily accurate representations of what the full policy is for,” says Caity Liggon, billing director at New Bedford Corporation. “And sometimes payers don’t have updated fee schedules. They’re using old codes that are no longer correct or codes that only apply to a certain setting across the board.”
Many cancer centers code based on CMS guidelines since they’re the standard. When insurance companies stray away from CMS, what cancer centers code is no longer accurate from the payer’s perspective.
Cancer centers can reduce denials, Liggon explains, by identifying each payer’s guidelines and using systems that can build in rules to flag them so that they get billed according to the payer and not necessarily just according to correct coding. “Many of the denial management, practice management and electronic medical record systems have the capability to build rules in,” she says. “We build rules into our systems that will flag the claims if they don’t meet a specific payer’s guidelines. We can do that based on CPT code, data service, diagnosis, payer and place of service. In the rule systems we use, we have flexibility to flag those claims and update them before they go to the payer.”
New Bedford’s coders and accounts receivable staff identify root causes for denied claims and then create a rules engine to prevent future denials. To identify the top priorities from a claims value and claims processing perspective, New Bedford staff use the Pareto Principle—namely, that 80 percent of consequences come from 20 percent of the causes.
By adopting the Pareto Principle, Liggon says administrators can focus on their biggest issues because typically resolving the top three issues will address 80 percent of the problems. “Look at
your top denial reasons or your top denial payers. By focusing on those, we were able to solve a lot of our denial issues,” she says. “Regarding denials that we could prevent, we focused on the larger picture instead of each individual claim—the biggest 20 percent of our denials (our highest dollar rate), which solved 80 percent of our individual denials. If you focus on the smaller issues,
you’re not necessarily going to solve that much of your problem.”
Potential coding problems can be placed into three categories:
- Errors: claims that will trigger a denial and must be fixed prior to claims submission;
- Warnings: code combinations that require confirmation of other conditions prior to claims submission; and
- Information: systematic reminders to coders about certain claims.1
The rules engine considers all charges in a course of treatment and then evaluates each charge individually for conflicts on date, payer, Dx/CPT code agreement, provider, referring provider, supervising provider, gender, modifiers, users and other data elements.1
New Bedford uses its own system, called Charge Book, which is the charge capture system it set up to be able to build rules in. “We also work with Waystar, our clearing house and denial management system, and they build the rules in for us,” says Liggon. “We submit our rules to them, they build the rules in, and then we either have them reject the claims on the front end so we can fix them, or if they can make the change themselves, they’ll build the rule to do that. Anyone can enroll with Waystar. Systems like Epic, NextGen and others can also
build in rules for clients.”
Administrators should first look at their existing software to see if it has rules engine capabilities. Then they can decide if they can work with what they have or if they need a different solution. While using software like WayStar costs money, cancer centers can recoup their expenses because the software helps to create efficiencies that wouldn’t exist otherwise.
Devoting time to training is key. “We’ve been using Waystar for two years, and we’re seeing huge results. It took our team three to six months to get comfortable using Waystar,” says Liggon. “Since we’re a billing and coding company, we train our account managers who then train our billing and coding teams.” Waystar and other systems offer webinars and training classes.
Liggon recommends build a rules engine by tackling one payer at a time. “We’ve identified rules through denial analysis. We look at trend reports and pinpoint where our highest denial rate is, then we identify whether the payer has guidelines in place that we need to build rules for,” she says. They noticed, for example, that Aetna has specific rules around IGRT coding when billing with IMRT that do not follow CMS guidelines. “We start by looking at a category and a payer and digging in to see where the issue is. We’ve always tried to identify rules that we can build into,” she says. New Bedford has seen a significant drop in denial rates.
It’s impossible to eliminate all denials because payers have guidelines around medical necessity and frequency that can’t be fixed by a rule. “Some of our clients had denial rates of 16–20 percent, and are now below 9 percent,” says Liggon.
Denial management is extremely important for any radiation oncology business. “If we’re not managing the denials well, then it’s money lost. Whenever you have to deal with a claim after
it’s denied by an insurance company, your chance of losing that claim increases significantly. If the insurance company doesn’t pay on the first pass it becomes a battle,” says Liggon.
Administrators should have a team that focuses on preventing and managing denials, so that other staff can focus on issues like medical necessity and frequency that denial rules or filters can’t mitigate. Liggon says, “Even having a staff member spend at least eight hours a week reviewing denials would go a long way. You can scale up or down depending on the size of your cancer center.”
References:
- Liggon, C. Workshop: Reduce Denials with a Payer Rules Filter. SROA Conference, October 25, 2022.
- The Investopedia Team. What is the Pareto Principle––aka the Pareto Rule or 80/20 Rule? Investopedia. April 7, 2022.
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