Payers have created more intricate requirements for accurately documenting clinical care and some hospitals struggle to keep up. Providers must meet numerous and, oftentimes, evolving documentation requirements to justify medical necessity for procedures, admissions and continued hospital stays. Recent data compiled by The Advisory Board are indicative of this intensifying challenge.
Reducing the prevalence of medical necessity denials will become even more important as hospital and health system leaders look to recoup funds lost during the initial surge of COVID-19.
By 2019, the percentage of denials attributable to technical or demographic documentation errors declined by 50 percent, suggesting efforts to curb these errors were successful. However, at the same time, the percentage of denials related to medical necessity errors surged from 27 percent to 53 percent. Researchers identified three reasons for this increase: 1) more automated reviews conducted by payers, 2) increasingly complicated criteria and 3) unique contract requirements.
As providers leverage new modes of care delivery to treat COVID-19 patients, difficulties related to the clinical documentation process are poised to intensify. To stem the tide of rising denials, hospitals and health systems must view the revenue cycle as a component of clinical care. Deepali Narula, Chief Operating Officer with Conifer Health Solutions, says this can be done with “revenue cycle clinical services,” which is comprised of several processes that occur throughout the patient care journey.
“These services include everything from preservice documentation and prior authorization approval to discharge planning,” Ms. Narula said. “They support better management of cost and quality and help healthcare organizations deliver better outcomes to patients.”
During a recent interview with Becker’s, Ms. Narula and Paul Sells, Conifer’s senior director of patient services, discussed the rise of medical necessity denials, the essential components of revenue cycle clinical services and how the ongoing public health crisis created by COVID-19 is likely to affect the future of denials prevention.