Treatment and Status Decisions Resulting in Claims Denials
Whether it’s the Medicare Recovery Audit Contractor (RAC) program or commercial equivalent, managing the claims review process and appealing denials is costly and time consuming. When a payer deems an inpatient admission or other treatment decision unjustified, a considerable portion of reimbursement, sometimes all, is lost to recoupment.
The expectation of full payment for services rendered is a fundamentally challenging proposition for every institution, even when standardized guidelines and order sets are used and rationale are well documented.
Revenue Erosion from Excess Utilization and Avoidable Complications
The margin of profit associated with a DRG or bundled payment can quickly erode if the level of resource utilization, including length of stay, creates an overall cost greater than the maximum eligible reimbursement.
Balancing quality of care and outcomes against financial impact is a conundrum fraught with controversy and disenchantment. The reality is, medicine is a business and continuous improvement cannot be achieved if revenue is not preserved.
1 Amin AP, Shapiro R, Novak E, Olsen M, Singh J, Bach RG, Cohen DJ. Costs of contrast induced acute kidney injury. Circ Cardiovasc Qual Outcomes. 2013 May;6:A316
2 Pinto et al. Economic evaluation of bivalirudin with or without glycoprotein IIb/IIIa inhibition versus heparin with routine glycoprotein IIb/IIIa inhibition for early invasive management of acute coronary syndromes. J Am Coll Cardiol. 2008 Nov 25;52(22):1758-68
3 Lindsey et al. The impact of bivalirudin on percutaneous coronary intervention-related bleeding. EuroIntervention. 2010;6:206–213
4 Centers for Medicare and Medicaid (CMS) FY2015 Final Hospital Inpatient Rule: MS-DRG 246, 247, 248, 249
Purchasing Insight: Coronary Artery Stents. Healthcare Finance (Data Source: MD Buyline), January 14, 2014
Care Practices Incongruent with Value-Based Arrangements
As the industry shifts to risk-bearing and value-based arrangements, relationships between payers and providers are not the only ones being redefined. Everybody who delivers and receives care is impacted, clinicians and patients alike. Expectations for behavior change and clinical transformation are pervasive, but what does this mean and how is it accomplished?
Fundamentally, the industry wants all parties to adopt practices that incorporate evidence-based shared decision-making, reduce unplanned readmissions, eliminate unwarranted variances in care, ensure rational consumption of resources, and decrease incidence of preventable adverse events.